Paid leave encash ment


Hi,

     I was in a company from more then 2 yrs. As per company policy Paid leave encash when employee resign from his post. but just 5 month ago our company create new rule that pl encashment can not be done. this is a private limited company. I have 15 PL in my account.Is there any law where i can get reimmbursement.

 

Thanks

Sandeep Sawant

 
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Advocate

if you fit under the definition of workman, then the encashmnt of PL shall be done under under the factoris act otherwise you would be covered under the shops and establishents act. you can claim the PL as it is ur right under the stautes.

 
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Sr.Manager-human resources

encashment of earned leave can be done as per statutory provisions. statutory obligations will stand good . dont think about HR policy. that has not got legal binding. 


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  Is  an Accounts   Manager working in a Factory regd under th Factories Act, 1948,   a workman for the purpose of Leave encashment on  resignation?

 
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Sr.Manager-human resources

yes. accounts manager is also a "workman" under factories Act and he is also eligible for encashment of earned leave on his resignation.

 
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Advocate

firstly, you must look ino the fact whether your organisation is registered under the factories act or not.

if not u hall be governed by the shops andestablishment act.

yes if you are in any way connected to the manufacturing process of the organistaion you shall be held as a worker and the provision s of the Factories aact shall apply to you.

 
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 How an Accounts Manager  can be  connected with Mfg  Process?   Since he maintains Accounts of the Company   or  complies  with   varioous laws concerning the Company,  can  he be treated as  indirectly connected with th mfg proces?  But, pl note  there is no direct  connection with Mfg process.      If this is the case,   can he  be called  worker for the purposes of Sec 79  o the Factories Act ?  pl  enlighten..  

 
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Company Secretary

It is the obligation of employer under various labour laws to allow leave with wages to employees.  However, except Factories Act there seems to be no law providing for employer's obligation to encash unearned leave of employees.  During recession period many companies have taken such a decision to control cost.  Such companies are asking employees to avail their accumulated leave within given time schedule.  I don't think it can be legally challenged.

 

 
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Advocate

Dear Mr. Agarwal,

apart from the Factories Act, the Shops & Est. Act of teh States provide provisions for paid leave/ earned leave. please check t for your convenience but the latter act shall apply to an establishment only when it is not registered under the Factories Act.

Dear Mr. Sampath ,

yes its a matter of research whthere the definition of worker shall include an accountant or not sice the definition of worker under the Fcatories Act is extremely wide which says any person connected with or incidental with the manufacturing process. at first instance, the same shall apply to an accountant alos but still it needs to be ascertained by saome case law. i ll lok out for the same and  let you kno soon.  

 
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Company Secretary

Dear Mr Manish,

Thanks for your message.  I am attaching Bombay Shop Act.  I find that Sec.35(2) talks about encashment only in cases where leave has been refused or employment ceases before availing leave.  In other cases during continuance of employment leave encashment is not obligatory on the part of the employer if the employee does not want to avail the leave.

Regards,

 



Attached File : 18 bombay shops & establishments act 1948.doc downloaded 711 times
 
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