Earned Leaves & Leave Encashment. Is it mandatory in a manufacturing organization (factory) to give earned leaves and leave encashment? Can the employer deny granting of earned leaves or deny leave encashment of earned leaves not availed by the employee?
Also, please inform if P.F. is deductible on leave encashment.
From India, Delhi
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1Also, please inform if P.F. is deductible on leave encashment.
From India, Delhi
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Dear Arun,
Please go through Sec. 79 of the Factories Act, 1948, and analyze all its provisions about Annual Leave With Wages, which is the statutory name for E.L. It is mandatory and not a subject matter of the choice of the employer.
Statutory encashment of E.L would arise only in the event of termination of employment. However, normally, industries follow the practice of annual surrender of EL at credit for cash benefit. This surrendered leave salary will not attract EPF/ESI subscriptions.
From India, Salem
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Please go through Sec. 79 of the Factories Act, 1948, and analyze all its provisions about Annual Leave With Wages, which is the statutory name for E.L. It is mandatory and not a subject matter of the choice of the employer.
Statutory encashment of E.L would arise only in the event of termination of employment. However, normally, industries follow the practice of annual surrender of EL at credit for cash benefit. This surrendered leave salary will not attract EPF/ESI subscriptions.
From India, Salem
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If carried over and encashed upon termination of service, resignation, or retirement, how many days of minimum encashment are compulsory? I did not find anything related to this in the section mentioned. I understand that 30 days of earned leave is the statutory limit to be encashed, and anything over and above this will lapse. Please clarify.
From India, Delhi
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From India, Delhi
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Please take note of the information shared in these links regarding 'EPF on leave encashment' and the Supreme Court judgment, along with the consequent circular issued by the EPFO on the subject.
- [PF Contribution on Leave Encashment - Urgent](https://www.citehr.com/10278-pf-contribution-leave-encashment-urgent.html#417281)
- [PF Contribution on Leave Encashment - Urgent](https://www.citehr.com/10278-pf-contribution-leave-encashment-urgent.html#418544)
From India, Bangalore
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- [PF Contribution on Leave Encashment - Urgent](https://www.citehr.com/10278-pf-contribution-leave-encashment-urgent.html#417281)
- [PF Contribution on Leave Encashment - Urgent](https://www.citehr.com/10278-pf-contribution-leave-encashment-urgent.html#418544)
From India, Bangalore
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At any point in time, the credit balance of the workman's Leave Account would reflect the maximum number of days of unavailed leave subject to the ceiling only. The excess would automatically lapse for calculation purposes.
From India, Salem
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From India, Salem
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So far as the accumulation of EL/PL & SL in the leave accounts is concerned, it's generally followed in most industries that further credits above the maximum-ceiling limits (number of days) automatically elapse. Some industries, as part of agreements with unions, reach a clause where a given number of days, such as about 10 days of EL/PL, is allowed to be encashed every or alternate year uniformly for all willing employees. This arrangement not only helps employees with their financial requirements but also enables the employer to ensure improved available mandays for their production planning. The industry where I was working had this facility. Individuals use the accumulations to be encashed when the need arises, such as for school/college admissions, festivals, etc., if their leave rules permit this facility. This is possible in small industries/firms.
In many instances, due to official exigencies, individuals in critical positions may not find relaxed days so that they can avail leave amidst pressing commitments/targets that need to be met. In such exceptional cases, the competent authority, duly vested with administrative powers, relaxes the stipulations and allows a part of CL or EL to remain unutilized to be carried over or encashed, respectively. Some banks and establishments also link the encashment with availing LTA.
From India, Bangalore
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In many instances, due to official exigencies, individuals in critical positions may not find relaxed days so that they can avail leave amidst pressing commitments/targets that need to be met. In such exceptional cases, the competent authority, duly vested with administrative powers, relaxes the stipulations and allows a part of CL or EL to remain unutilized to be carried over or encashed, respectively. Some banks and establishments also link the encashment with availing LTA.
From India, Bangalore
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From Ukraine, Lviv
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Very interesting post. I want to share it on my blog at https://www.blogger.com/about/. What do you think about it?
From Ukraine, Lviv
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Hi Sir,
I am a new employee who recently joined my company one month ago. I need to write an email to request details regarding PF/ESIC/Gratuity/Holiday list for FY2020 and the number of paid leaves available.
Could you please advise on how I should draft this email to HR?
Thank you,
Yasmin
From India, Ludhiana
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I am a new employee who recently joined my company one month ago. I need to write an email to request details regarding PF/ESIC/Gratuity/Holiday list for FY2020 and the number of paid leaves available.
Could you please advise on how I should draft this email to HR?
Thank you,
Yasmin
From India, Ludhiana
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Online payment of PF mandatory from 1.1.2016.pdf