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vnaik (ASM)     30 April 2014

Pl leave enclashment

I am working for pvt ltd co from 30 years, my company have change policy on leave encashment,earlier it  was on gross salary,

now as per new circular sattlement will be  on basic salary.

 

My question is new circular will applicable to my earlier  pending PL leave or not.

Earlier all sattlemet was on gross salary.

Nandesh



Learning

 5 Replies

Kumar Doab (FIN)     30 April 2014

 

What is this establishment: Commercial, Industrial, Small Enterprise?

The employee is located in which state?

Redg. Office of the company is in which state?

 

How many employees are employed in this company?      

 

Assuming that the company is  covered by ( name of your state) Shops and Commercial Establishments Act you may look into it in Section on Leave/Wages during Leave.

It is usually @ Daily Average of wages e.g. ( that can be obtained by dividing monthly salary/26* NO. of days in month)

 

The Delhi Shops and Establishments Act, 1954

]

23. Wages during Leave.—Every employee shall be paid for the period of his leave at a rate

equivalent to the daily average of his wages for the days on which he actually worked during the

preceding three months, exclusive of any earnings in respect of overtime but inclusive of

dearness allowance.

 

The EL is usually termed as Annual Leave in enactments.

 

The leave policy of the company can not be inferior to the provisions of the enactments applicable to the establishment. It can be superior.

IN case of difficulty approach employees unions, Trade Unions, Inspector under ( name of your state) Shops and Commercial Establishments Act, o/o Labor Commissioner or your lawyer.

 

The change in policy can not be from back date.

Sanjay Malik (Manager- Legal & Compliance )     30 April 2014

as explained in above post also want to add this change is amount change in service condition under section 9A, and before the change effect 21 days notice under ID Act is necessary to be given, otherwise any change can be effect and amount unfair labour practice.

in most MNC's they are paying Leave Encashment on basic salary only as practice, but legally it wrong. the leave encashment should be payable on gross and it has been already mentioned by the fellow member. when you are taking leave, you will get full salary but when you are paid encashment you will get basic salary, its not reasonable and legal. The leave encashment shall be on fully wages/normal wages as mentioned in all most all states S& E Acts.

Sanjay Malik (Manager- Legal & Compliance )     30 April 2014

as explained in above post also want to add this change is amount change in service condition under section 9A, and before the change effect 21 days notice under ID Act is necessary to be given, otherwise any change can be effect and amount unfair labour practice.

in most MNC's they are paying Leave Encashment on basic salary only as practice, but legally it wrong. the leave encashment should be payable on gross and it has been already mentioned by the fellow member. when you are taking leave, you will get full salary but when you are paid encashment you will get basic salary, its not reasonable and legal. The leave encashment shall be on fully wages/normal wages as mentioned in all most all states S& E Acts.

SRIDHAR N L (MANAGER - HR & ADMIN.)     01 May 2014

Earned Leave is given only on Basic Salary as per law, Factories Act .

Normally leave encashment is paid for Gross Salary in order to discourage taking leave substantiating that loss due to leave by way of salary is less than the production loss due to his / her absence.  

This is followed in come companies only.  

We cannot legally claim leave encashment for Gross salary.

regards,

Sridhar N L

9551016279

Kumar Doab (FIN)     04 May 2014

 

The employee should look into the enactment(s) applicable to the establishment.

The leave policy of the company can not be inferior to the provisions of the enactments applicable to the establishment. It can be superior as per drafted policy of employer, negotiated bilateral settlements between employees-employer, standing orders................

 

If the establishment of the querist (whihc he has not replied) is a Factory:

 

 

 

Factory Act: Rate As per : Section 79 in The Factories Act, 1948…

Wages as per: Section 80 in The Factories Act, 1948….

80. Wages during leave period.
at a rate equal to the daily average of his total full time earnings for the days on which 3[ he actually worked] during the month immediately preceding his leave, exclusive of any overtime and bonus but inclusive of dearness allowance and the cash equivalent of the advantage accruing through the concessional sale to the worker of foodgrains and other articles. ……………..
(2) The cash equivalent of the advantage accruing through the concessional sale to the worker of foodgrains and other articles shall be computed as often as may be prescribed…………. 



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