I need guidance on the following issue. Please help me with the relevant Act and corresponding case law:
An employee based out of Mumbai, working with our company (Registered Office - Lucknow) since June 2015, resigned in March 2018. At the time of resignation, she had 19 days of Privilege Leave Balance in her account.
My questions are:
a) Is the company bound to encash her unearned leaves? If yes, then under which act, and if no, then what is the respective statute that supports this?
b) If the company is bound to encash leaves, what would be the calculation for it?
From India, Lucknow
Acknowledge(0)
Amend(0)
1An employee based out of Mumbai, working with our company (Registered Office - Lucknow) since June 2015, resigned in March 2018. At the time of resignation, she had 19 days of Privilege Leave Balance in her account.
My questions are:
a) Is the company bound to encash her unearned leaves? If yes, then under which act, and if no, then what is the respective statute that supports this?
b) If the company is bound to encash leaves, what would be the calculation for it?
From India, Lucknow
Acknowledge(0)Amend(0)
Is your organisation covered by the Factory or Shop & Establishment ACT? In either of case leave encashment to be proceeded accordingly.
From India, Pune
Acknowledge(0)Amend(0)
From India, Pune
Acknowledge(0)Amend(0)
The ex-employee has to be paid the unused privilege/earned leaves as part of full and final settlement of accounts upon termination/resignation from employment. It is not encashment; it is more of settlement of accounts. The calculation is done based on the monthly gross salary of the employee.
From India, Hyderabad
Acknowledge(0)Amend(0)
From India, Hyderabad
Acknowledge(0)Amend(0)
Both Section 79 of the Factories Act and Section 14 of the Shop Establishment Act mention the encasement of PL upon cessation of employment. In this case, you are bound to encash her unused privileged leaves.
The calculation will be: (Her last Basic Pay/30) * Number of PL to be encashed.
Regards,
Rahul Chhabra
From India, Delhi
Acknowledge(0)Amend(0)
The calculation will be: (Her last Basic Pay/30) * Number of PL to be encashed.
Regards,
Rahul Chhabra
From India, Delhi
Acknowledge(0)Amend(0)
Yes, your company is bound to pay or provide encashment of earned leave. In the instant case, the employee is eligible to receive payment for leave balance of 19 days along with leave earned during the year 2018 until her resignation.
The rate of payment is based on Basic+DA or Basic, as per your policy, or on which you calculate EPF, or the amount deducted for one day of absence.
From India, Mumbai
Acknowledge(0)Amend(0)
The rate of payment is based on Basic+DA or Basic, as per your policy, or on which you calculate EPF, or the amount deducted for one day of absence.
From India, Mumbai
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
Employee Benefits.doc
PF Contribution on Leave Encashment - Clarification by EPFO.pdf