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Leave Encashment

(Querist) 05 April 2008 This query is : Resolved 

It is understood that PF cannot be recovered from Leave Encashment.
I want to know the effective date of amendment in the said act.
H. S. Thukral (Expert) 05 April 2008
Dear Mr. Sudhir
The Act is not amended but the Supreme Court in a decision on 12 May 2008 in the matter of Manipal Academy of Higher Education v Provident Fund Commissioner held that the amount received by encashing the earned leave is not a part of "basic wage" under s. 2(b) of Employees' Provident Fund and Miscellaneous Provisions Act, 1952, requiring pro rata employer's contribution. - Held, term 'basic wage' which includes all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in accordance with the terms of the contract of employment can only mean weekly holidays, national holidays and festival holidays etc - Basic wage was never intended to include amounts received for leave encashment. Appeal of the Petitioner allowed.

H. S. Thukral (Expert) 05 April 2008
PS The date of decision may kindly be read as 12 March 2008
Sudheer (Querist) 07 April 2008
Thanks for your immediate reply


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