Earned Leave Encashment - Doc Download

Hello, How is EARNED LEAVE encashment calculated? is it to be calculated on Basic or Gross? Please Clarify. Regards Sudha
25th February 2008 From India, Hyderabad

Hello,
it is dependent on the existing leave policy and objectives of leave encashment. However, it can be calculated as follows:
1. BASIC (GROSS)/365*NUMBER OF DAYS in view
or
2. BASIC (GROSS)/TOTAL NO OF ANNUAL WORKING DAYS*NUMBER OF DAYS in view
the adoption of either option 1 or 2 will be determined by the OVERALL HR
STRATEGY and goals.
regards,
duro
25th February 2008

Dear friends,
The provisions related to Earned Leaves are provided in Sec. 79 and sec. 80 of the Factories Act (like provisions are in Sec. 14 & 25 of the Punjab Shop & Commercial Establishment Act 1958 pl. check applicable state acts) which provides for the Annual leaves with wages and Wages during wage period, these sections only provides for entitlement, carry forward, requirements for availing, wages to be paid during wage leave period, but there is nothing on encashment of the earned leaves (except on being discharged, dismissed, quits employment superannuate or dies while in service) means that the unavailed leaves will laps,
So to my understanding the encashment should be as per the company policy and for calculation we can refer to Sec. 80 of Factories Act or similar sections as referred above.
Regards,
Sanjiv Sharma
26th February 2008 From France, Courbevoie

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provisions_of_factories_act_with_reference_to_leaves_147.doc (43.5 KB, 1170 views)

Thankyou for the information.
So as per the follwoig clause, which is prensent in the ACT, it should be encahsed on Gross. (not Basic) ?? Please confirm. (My question is for Resigned Employee, and he is claiming for earned leave encashemt.
If a worker is discharged or dismissed from service or quits his employment or is superannuated or dies while in service, during the course of the calendar year, he or his heir or nominee, as the case may be, shall be entitled to wages in lieu of the quantum of leave to which he was entitled immediately before his discharge, dismissal, quitting of employment, superannuation or death calculated at the rates specified in sub-section (1), even if he had not worked for the entire period specified in sub-section (1) or sub-section (2) making him eligible to avail of such leave, and such payment shall be made--
26th February 2008 From India, Hyderabad

Dear Sudha555, Earned leave as mentioned earlier by an expert is only on Basic+DA....gross has many component and cannot be considered for leave encashment. Any legal guru there... Regards, Ukmitra
26th August 2009 From Saudi Arabia, Riyadh