Dear all,
I have been newly appointed as HR Executive in one of the MNC and unfortunately there is no one to guide me on this, which is why I look forward to the members of CiteHR to help in this regard. Need advice on Leave Encashment process. It's a lengthy one so please bare with me. :)
Before I position my question here's a little background, which will help you guys to help me.
As per my company's leave policy there are total 27 General Leaves in a calendar year(Jan to Dec). No bifurcation of CL, SL or PL as in other companies. All 27 of them are termed as General Leaves. 15 are mandatory to consume and rest 12 can be carried forward. The leaves get accumulated every month for an employee to be able to consume. So for e.g. an employee has worked for 6 months he is entitled for 13.5 GLs.
The probation period is for 6 months and apparently no paid leaves during this period. However the employee will keep earning the leaves at the rate of 2.25 Leaves p.m. in his Leave Kitty, which he can consume after 6 months.
So here's the situation:-
Employee:- XYZ
DOJ:-01-May-2013
DOR:- 10th-Jul-2014
I have a confusion regarding the leaves to be carried forward from FY2013 to FY2014 as opening balance.
As per the leave policy since he has worked for 8 months, he is entitled for 2.25*8 = 18 Leaves for 2013. However while carrying forward to next year we'll have to deduct the mandatory leaves on a prorata basis too, which is 1.25*8 = 10 Leaves. But since for the first 6 months he was on a probation period and could not avail any of the GLs, would it be really fair to deduct 10 leaves while carrying forward to next year as opening balance.
The situation will be worse if he'd have joined on 01-Jul-14'. Working for 6 months, earned 13.5 leaves, but couldn't consume a single one before carry forward takes place.
The FnF of this employee is pending since long, just due to lack of information on same.
A prompt answer would be highly appreciated. Really. Please suggest.
Best Regds
HR Executive
From India, Mumbai
1I have been newly appointed as HR Executive in one of the MNC and unfortunately there is no one to guide me on this, which is why I look forward to the members of CiteHR to help in this regard. Need advice on Leave Encashment process. It's a lengthy one so please bare with me. :)
Before I position my question here's a little background, which will help you guys to help me.
As per my company's leave policy there are total 27 General Leaves in a calendar year(Jan to Dec). No bifurcation of CL, SL or PL as in other companies. All 27 of them are termed as General Leaves. 15 are mandatory to consume and rest 12 can be carried forward. The leaves get accumulated every month for an employee to be able to consume. So for e.g. an employee has worked for 6 months he is entitled for 13.5 GLs.
The probation period is for 6 months and apparently no paid leaves during this period. However the employee will keep earning the leaves at the rate of 2.25 Leaves p.m. in his Leave Kitty, which he can consume after 6 months.
So here's the situation:-
Employee:- XYZ
DOJ:-01-May-2013
DOR:- 10th-Jul-2014
I have a confusion regarding the leaves to be carried forward from FY2013 to FY2014 as opening balance.
As per the leave policy since he has worked for 8 months, he is entitled for 2.25*8 = 18 Leaves for 2013. However while carrying forward to next year we'll have to deduct the mandatory leaves on a prorata basis too, which is 1.25*8 = 10 Leaves. But since for the first 6 months he was on a probation period and could not avail any of the GLs, would it be really fair to deduct 10 leaves while carrying forward to next year as opening balance.
The situation will be worse if he'd have joined on 01-Jul-14'. Working for 6 months, earned 13.5 leaves, but couldn't consume a single one before carry forward takes place.
The FnF of this employee is pending since long, just due to lack of information on same.
A prompt answer would be highly appreciated. Really. Please suggest.
Best Regds
HR Executive
From India, Mumbai
Dear you have posted a very confused question.
First of all if your organisation is covered under factories act 1948, then you have to provide ELs according to section 79 of factories act. You have to define the category of Leaves like EL, SL and CL. Els are carrry forwared. Please change your leave policy according to the applicable act in your state..
Regards
Dinesh Kumar
From India, New Delhi
First of all if your organisation is covered under factories act 1948, then you have to provide ELs according to section 79 of factories act. You have to define the category of Leaves like EL, SL and CL. Els are carrry forwared. Please change your leave policy according to the applicable act in your state..
Regards
Dinesh Kumar
From India, New Delhi
Thanks for the prompt response Dinesh. I hv to yet confirm if our company is covered under factories ACT 1948.
However, the issue at hand needs to be resolved basis our current company policy.
I'll try to rephrase the issue, and would highly appreciate prompt responses since the FnF for this employee is pending since long and I'd like to resolve it asap.
Confusion:- Pertaining to how many leaves will be carried forward from 2013 to 2014 as an opening balance. Employee has resigned and we need to calculate the Leave Encashment for his FnF settlement.
DOJ:- 01-Jun-2013
DOR:-16-Aug-2014
Total Leaves:- 27 General Leaves
Mandatory Leaves:- 15 General Leaves
As per the Leave Policy, if an employee exits in the middle of the year the mandatory leaves will be deducted from the earned leave and then the remaining will be encashed.
Leave data for 2013:-
Earned Leaves in 2013:- 15.75(2.25*7)
Mandatory leave deduction:- 8.75(1.25*7)
15.75-8.75 = 7 Leaves
So, here's the question:- Will only 7 Leaves be carried forward to the next year as opening balance?
My concern is, he was on probation for first six months(Jun-Nov), wherein he wasn't entitled to take any leaves, even though the leaves were getting accumulated in his leave kitty. So, technically he had only a month i.e December to avail the 15.75 Leaves. Isn't that unfair?
How many leaves should be carried forward to next year?
Regds
Awaiting for response eagerly
From India, Mumbai
However, the issue at hand needs to be resolved basis our current company policy.
I'll try to rephrase the issue, and would highly appreciate prompt responses since the FnF for this employee is pending since long and I'd like to resolve it asap.
Confusion:- Pertaining to how many leaves will be carried forward from 2013 to 2014 as an opening balance. Employee has resigned and we need to calculate the Leave Encashment for his FnF settlement.
DOJ:- 01-Jun-2013
DOR:-16-Aug-2014
Total Leaves:- 27 General Leaves
Mandatory Leaves:- 15 General Leaves
As per the Leave Policy, if an employee exits in the middle of the year the mandatory leaves will be deducted from the earned leave and then the remaining will be encashed.
Leave data for 2013:-
Earned Leaves in 2013:- 15.75(2.25*7)
Mandatory leave deduction:- 8.75(1.25*7)
15.75-8.75 = 7 Leaves
So, here's the question:- Will only 7 Leaves be carried forward to the next year as opening balance?
My concern is, he was on probation for first six months(Jun-Nov), wherein he wasn't entitled to take any leaves, even though the leaves were getting accumulated in his leave kitty. So, technically he had only a month i.e December to avail the 15.75 Leaves. Isn't that unfair?
How many leaves should be carried forward to next year?
Regds
Awaiting for response eagerly
From India, Mumbai
Dear......Mr.Unwritten.........
IFirst of all you should know that under which act your establishment or unit is covered. The leave entitlement is already specified in the applicable enactments., which is a statutory leave to be allowed to the employees. As per the provisions it is depend upon the number of working days the employee actually works. If we predict the employee will work for minimum 240 days and then he will be eligible to get a leave of 12 days @ 1 day for every 20 days or at the maximum 15 days based on the number of working days Normally this is called as Privilege leave or Earned Leave. No leave rules are specified as Casual Leave or Sick leave. . Beyond this, the employer can also allow to grant the leave at his discretion for which there is no any binding. I am not followed how your company is allowing 27 days. Are you having any agreement with the workers or union. What is the base for calculation of 27 days. Unless you specify or come out with the facts it will be difficult to answer your query.
The leave rules are very easy but you are making complication in your computation of leave. As such there is no any fraction of days. It should be minimum 1 day or if days exceeds more than 50 % then it will be 2 not 1 1/2 days. You read the Laws and study then you raise your query. Dont expect ready made answers. Unless you put your efforts in gaining the knowledge you will not succeed in your career. Please see that whenever you are posting any query at least give your name so that it will be interacted in proper way.
Adoni Suguresh
Sr.Executive (Pers, Admin & Ind.Rels) Rtd
Labour Laws Consultant
From India, Bidar
IFirst of all you should know that under which act your establishment or unit is covered. The leave entitlement is already specified in the applicable enactments., which is a statutory leave to be allowed to the employees. As per the provisions it is depend upon the number of working days the employee actually works. If we predict the employee will work for minimum 240 days and then he will be eligible to get a leave of 12 days @ 1 day for every 20 days or at the maximum 15 days based on the number of working days Normally this is called as Privilege leave or Earned Leave. No leave rules are specified as Casual Leave or Sick leave. . Beyond this, the employer can also allow to grant the leave at his discretion for which there is no any binding. I am not followed how your company is allowing 27 days. Are you having any agreement with the workers or union. What is the base for calculation of 27 days. Unless you specify or come out with the facts it will be difficult to answer your query.
The leave rules are very easy but you are making complication in your computation of leave. As such there is no any fraction of days. It should be minimum 1 day or if days exceeds more than 50 % then it will be 2 not 1 1/2 days. You read the Laws and study then you raise your query. Dont expect ready made answers. Unless you put your efforts in gaining the knowledge you will not succeed in your career. Please see that whenever you are posting any query at least give your name so that it will be interacted in proper way.
Adoni Suguresh
Sr.Executive (Pers, Admin & Ind.Rels) Rtd
Labour Laws Consultant
From India, Bidar
Dear Adoni sir,
Thanks for valuable information. Could you please put some more light on leave as per the law. I am working in an automobile dealership which comes under factory act & also shop & establishment act since we are into sales and service.
Now we want to give 30 leaves in a year, however, PL should be as less as possible. We are thinking to give leave in a year as follow :-
PL - 15
CL - 9
SL - 6
However, someone suggested me to go ahead as follow :-
PL - 12
CL - 12
SL - 6
Please guide,
Regards,
Manoj
From India, Mumbai
Thanks for valuable information. Could you please put some more light on leave as per the law. I am working in an automobile dealership which comes under factory act & also shop & establishment act since we are into sales and service.
Now we want to give 30 leaves in a year, however, PL should be as less as possible. We are thinking to give leave in a year as follow :-
PL - 15
CL - 9
SL - 6
However, someone suggested me to go ahead as follow :-
PL - 12
CL - 12
SL - 6
Please guide,
Regards,
Manoj
From India, Mumbai
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
PF Contribution on Leave Encashment - Clarification by EPFO.pdf
SC -PF judgment on No PF on Leave encashment.doc
EPFO Circular Leave Encashment.jpg