Dear Seniors, My name is Nijisha. I am working in a Pharma wholesale and retail firm as an HR Officer. Our firm has three types of leaves: Casual Leave, Sick Leave, and Public Holiday. Can anyone please clarify whether all these types of leaves are included in the Leave Encashment Policy? Or are there any exemptions or special cases?
From India, Kochi
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From India, Kochi
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In my organization, it's only casual leave that gets encashed at the end of the year. Sick leave gets carried forward. Privilege leave gets encashed when the employee leaves the organization. Also, when the accumulated balance of privilege leave crosses 90 days, the leaves accumulated over and above 90 days are encashed. For example, if an employee has accumulated a privilege leave balance of 100 days, then 10 days will be the privilege leave encashment.
If an employee works on a public holiday, they are given a compensatory off, and there is no leave encashment for public holidays. In the leave encashment policy, it's only casual leave and privilege leave that are included for encashment.
Regards
From India, Mumbai
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56If an employee works on a public holiday, they are given a compensatory off, and there is no leave encashment for public holidays. In the leave encashment policy, it's only casual leave and privilege leave that are included for encashment.
Regards
From India, Mumbai
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I think your firm has been violating the Shops and Commercial Establishment rules by not providing Privilege Leave/Earned Leave. You need to speak to management immediately and resolve this. Vishal has already explained one of the standard practices.
From India, Bangalore
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From India, Bangalore
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Yes, I agree with the contention that your Pharma company is violating the rules/provisions by not allowing you and its other employees Annual Leave, Earned Leave, or Privileged Leave, whatever you may call it. It is as per statute, which has to be allowed at 1 day for each 20 days of physical attendance subject to a minimum of 240 days qualifying attendance. If the physical attendance falls short of 240 days, the authorized leave—Casual Leave, Medical Leave, any other authorized leave like maternity leave in case of female employees, injury leave, etc.—has to be taken into account for qualifying the person for leave. However, the leave will be calculated on actual physical attendance only on a pro-rata basis.
You must talk to your HR Manager in this regard. Best wishes.
Regards,
AK Jain
From India, New+Delhi
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You must talk to your HR Manager in this regard. Best wishes.
Regards,
AK Jain
From India, New+Delhi
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Leave Encashment Policy Clarification
Who is experienced in the same organization has rightly clarified. I would just like to add here that leave encashment is a management policy. In most organizations, privilege leave is encashable, and earned leave, if not availed, gets lapsed. So, the HR Manager has to propose to the management and implement this policy.
Hope this will also be helpful.
Regards,
Eswararao Ivaturi.
From United States, Cupertino
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Who is experienced in the same organization has rightly clarified. I would just like to add here that leave encashment is a management policy. In most organizations, privilege leave is encashable, and earned leave, if not availed, gets lapsed. So, the HR Manager has to propose to the management and implement this policy.
Hope this will also be helpful.
Regards,
Eswararao Ivaturi.
From United States, Cupertino
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You should first refer to the Kerala Shops & Commercial Establishment Act, 1960 for a better understanding of the number of leaves entitled to employees.
Aspects to Check Under the Kerala Shops & Commercial Establishment Act, 1960
You may please check the following aspects with respect to the above Act:
- Total number of leave with wages entitled to an employee who has completed 12 months of continuous service.
- Holidays with wages for a period of 12 days.
- Leave with wages for a period of 12 days on the grounds of sickness.
- Casual leave with wages for a period of 12 days for any reasonable grounds.
Some companies allow unused Sick Leave to be carried forward as Sick Leave itself for a limited number of days or merged with Privilege or Earned Leave in the following year.
Regarding Casual Leave, it is generally not allowed to be carried forward and will lapse; however, some companies compensate the unused leave with an amount at the rate of the basic salary in the following year. All of this depends on the company policy.
@ Arun Jain - you were referring to the Factory Act, which states that 1 day = 20 days worked for EL / PL.
Regards,
Suresh
From India, Pune
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Aspects to Check Under the Kerala Shops & Commercial Establishment Act, 1960
You may please check the following aspects with respect to the above Act:
- Total number of leave with wages entitled to an employee who has completed 12 months of continuous service.
- Holidays with wages for a period of 12 days.
- Leave with wages for a period of 12 days on the grounds of sickness.
- Casual leave with wages for a period of 12 days for any reasonable grounds.
Some companies allow unused Sick Leave to be carried forward as Sick Leave itself for a limited number of days or merged with Privilege or Earned Leave in the following year.
Regarding Casual Leave, it is generally not allowed to be carried forward and will lapse; however, some companies compensate the unused leave with an amount at the rate of the basic salary in the following year. All of this depends on the company policy.
@ Arun Jain - you were referring to the Factory Act, which states that 1 day = 20 days worked for EL / PL.
Regards,
Suresh
From India, Pune
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Hi, I am Neil and now working in Vietnam.
Firstly, the company has to observe the corresponding laws governing leave benefits. What and how many leaves to give must conform to the existing laws of a country.
Secondly, the conversion of unused leaves to cash is a company prerogative. Some companies advocate its usage or conversion to cash to generate productivity. Others allow the leaves to accumulate, which can be commuted to cash when an employee retires or resigns.
As an HR practitioner, what you can do is benchmark with companies belonging to your industry to check the current practices so as to allow your company to be "comparable" to what they have been practicing.
Regards,
Neil
From Vietnam, Vinh
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Firstly, the company has to observe the corresponding laws governing leave benefits. What and how many leaves to give must conform to the existing laws of a country.
Secondly, the conversion of unused leaves to cash is a company prerogative. Some companies advocate its usage or conversion to cash to generate productivity. Others allow the leaves to accumulate, which can be commuted to cash when an employee retires or resigns.
As an HR practitioner, what you can do is benchmark with companies belonging to your industry to check the current practices so as to allow your company to be "comparable" to what they have been practicing.
Regards,
Neil
From Vietnam, Vinh
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Pharma wholesale and retail firms come under the Shops and Establishments Act of the State Government concerned, where the applicable leaves (as already mentioned by Mr. Suresh, a contributing member) are given.
Kerala Shops and Commercial Establishments Act 1960
As per Section 13 of CHAPTER III (Holidays and leave) of the Kerala Shops and Commercial Establishments Act 1960, wherein Act 34 of the Kerala Shops and Commercial Establishments Act 1960 is amended, the encashment of earned leave is allowed if the employee is discharged by his employer before he has been allowed the holidays or if, having applied for and been refused holidays, he quits his employment before he has been granted the holidays. In such cases, the employer shall pay him the amount payable under this act in respect of the leave to which he was entitled. According to the act, employees can accumulate leave to a maximum extent of 24 days, and thereafter, it lapses. Hope this is now clear.
Regards,
Eswararao Ivaturi.
From United States, Cupertino
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Kerala Shops and Commercial Establishments Act 1960
As per Section 13 of CHAPTER III (Holidays and leave) of the Kerala Shops and Commercial Establishments Act 1960, wherein Act 34 of the Kerala Shops and Commercial Establishments Act 1960 is amended, the encashment of earned leave is allowed if the employee is discharged by his employer before he has been allowed the holidays or if, having applied for and been refused holidays, he quits his employment before he has been granted the holidays. In such cases, the employer shall pay him the amount payable under this act in respect of the leave to which he was entitled. According to the act, employees can accumulate leave to a maximum extent of 24 days, and thereafter, it lapses. Hope this is now clear.
Regards,
Eswararao Ivaturi.
From United States, Cupertino
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Can anyone tell me the procedure for Privilege Leave (PL) after the resignation of an employee?
Privilege Leave Policy
In our organization:
- Privilege Leave: The Privilege Leave entitlement for all employees will be a maximum of 15 days every year. This will be added to the leave account at the rate of 5 leaves every four months in arrears, i.e., 5 days of Privilege Leave for every 4 months on the rolls (periods of unpaid leave are excluded while calculating).
- Privilege Leave is not applicable for the first year of service with the company.
- The accumulation limit for earned leave will be 45 days irrespective of the number of years of service put in by an employee. Sundays and holidays falling within the span of Earned Leave (EL) will be added to the Earned Leave account. Requests for EL should preferably be made at the beginning of the year or at least 7 working days in advance.
- An employee has to accrue at least 30 days of EL for encashment purposes.
- A maximum of 45 days of Privilege Leave can be taken at a time.
But now, I want to add the PL encashment procedure to my policy after an employee resigns.
Please help me out.
Regards
From India, Delhi
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Privilege Leave Policy
In our organization:
- Privilege Leave: The Privilege Leave entitlement for all employees will be a maximum of 15 days every year. This will be added to the leave account at the rate of 5 leaves every four months in arrears, i.e., 5 days of Privilege Leave for every 4 months on the rolls (periods of unpaid leave are excluded while calculating).
- Privilege Leave is not applicable for the first year of service with the company.
- The accumulation limit for earned leave will be 45 days irrespective of the number of years of service put in by an employee. Sundays and holidays falling within the span of Earned Leave (EL) will be added to the Earned Leave account. Requests for EL should preferably be made at the beginning of the year or at least 7 working days in advance.
- An employee has to accrue at least 30 days of EL for encashment purposes.
- A maximum of 45 days of Privilege Leave can be taken at a time.
But now, I want to add the PL encashment procedure to my policy after an employee resigns.
Please help me out.
Regards
From India, Delhi
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First of all, you have to look at your company's leave policy that you are following. Secondly, you need to consider the types of leave you want to include in your leave encashment at the end of every year. After gathering all this information, you should approach your top management with a good understanding of labor laws, as mentioned in the previous post. Then, you can establish a comprehensive leave encashment policy. Regarding the types of leave in your company, you should also ensure compliance with the applicable laws in your company. Nijisha, Paid Leave (PL) policies can vary among organizations, so it is at the sole discretion of your management whether to implement it or not.
If you have any further queries, feel free to email me. Regards
From India, Surat
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If you have any further queries, feel free to email me. Regards
From India, Surat
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Leave Policy.doc