Sudarshan Jain 04 April 2023

Leave encashment

Hi, An company making payout on basic salary for leave encashment of maximum 30 days at the time of resignation/retirement of employee and balance leave got lapse if any. Also, they have another policy for notice pay recovery where company consider gross salary for calculation of any notice pay recovery.

Is there any rule or case on leave encashment done for the leave beyond 30 days and calculation done on gross salary instead of basic salary? Any suggestion in support of the given case, Pl help.

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3 Replies

Dr J C Vashista (Advocate) 05 April 2023

Leave encashment rule of the company has to be perused before forming an opinion and oblige.

However, central civil services rules provide for accumulation of leave of 300 days for encashment

Sudarshan Jain 05 April 2023

Thanks Vashista sir for reply.

It is a private limited company and central civil service rule are for public servent or govt employee. Is this rule apply to private limited company or not.

Also, is pvt Ltd company policy prevail over and any section or ruling for pvt ltd employee will be helpful.

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 ) 05 April 2023

The leave encashment policy differs from company to company, and the rules vary. Some companies usually pay for the leaves taken, or some adjust them in the next calendar year. However, the amount of unavailed leaves and bonuses must be settled by the 7th or 10th of the following month after resignation, according to the 1948 Factories Act.