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lakshminarayanan (Hr Executive)     21 January 2012

Leave rule and regulations for factory employees

Dear Sir/ Madam,

Please help me regarding Employee Leave Rule.

1.Any Act  /  Rule and regulations pertaining to leave Eligiblity?

2. Eligiblity of CL/ SL / PL (any splitup Acording to Law)

3. whether leave Encashment to be calculated on basic salary or on gross salary. any act or judgement regarding leave Eligiblity / Encashment


 6 Replies

kameswarao S (Head HR)     21 January 2012

If you'rs is a factory then the leaves are according to Factories act and if yours is under shops and establishments act then the leaves are to be under shops and establishment act.

As far as the encashment is concerned it depends on the company policy & rules. Most of the organizations follow the process of pay the encashment amount on Basic + DA.

Regards - kamesh

V. VASUDEVAN (LEGAL COUNSEL)     21 January 2012

Mr. Kameshwara Rao's answer is clear, except the fact that for a factory, the leave encashment is governed by the Factories Act and Rules and similarly for an establishment - the respective S&E Act & Rules. COmpany policy on flexible leave and encashment would be applicable to non-workmen, whose terms are governed by their employment contract. 


lakshminarayanan (Hr Executive)     21 January 2012

Thank u


Kindly help me in case of leave Eligibility/ Split up of (casual leave, Sike leave & Pay leave)

arulprasath (HR & Legal)     14 November 2014



All employees are eligible for 10 days CL per year As per the Ind. employment (Standing orders) central rule, PL calculated as one PL for every twenty worked days and it will be availed after completion of 240 days.


Encashment is last drawn basic + DA / 26*No. of PL





Kumar Doab (FIN)     15 November 2014

Agreed with experts. The establishment can offer superior benefits than provided for in enactments applicable to i it but can not provide inferior provisions.

V. VASUDEVAN (LEGAL COUNSEL)     16 November 2014

Industrial Establishment Act or Standing Orders may not apply to all employees. If it is an establishment under the S&E Act, should refer the S&E Act of the relevant State for the number of leaves and break ups

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