#Askme - Question on Leave

Hi, Thanks for asking your queries related to Earn Leave, Leave Encashment, Leave Accumulation & Leave during Notice Period. 

My expression are generic in nature, which can be fitted for any state.

Question 1 - How much of maximum leave can be accumulated by an employee on separation?

Answer - Every worker shall be permitted to accumulate earned leave up to a maximum of forty-five days.  

Question 2 - How much of maximum leave can be encashed to an employee on separation? Eg. If an employee has 50  earned leaves , can we encash only 40 of it.

Answer -   The worker  shall have a right to encash leave in excess of 45 days only when he/she applied fifteen days in advance &  the company/employer/manager refuses to sanction the leave

As per the case provided by your good-office - Said employee can only avil encashment upto 5 days only, as excess to 45 days can be remitted while working. 

Question 3 - Is there any limit ( min or max) on the number of earned leaves that can be carried forwarded per year? If the employee does not consume his earned leave, can they lapse at the end of the year?

Answer- No Act provides the employer to dissolve any earned leave of a worker. Nor it's been specified with any min. or max. boundary. 

Question 4 - Can we have a mandatory leaves concept? What are the implications ? Any restrictions as per act?

Answer-  No Act sought to force workers to have mandatory leave. A leave is the choice by right of the worker during his employment.  

Companies may encourage workers to take the advantage of leave, by their internal policy, but can't force workers beyond his/her willingness. 

Question 5 - How many leaves can be taken during notice period ? If any employees take leave during notice period, can we extend the last working day of the employee ?

Answer - An employer can't deny the employee's request for availing leave during the notice period. Our statement is supported by the virtue of the Hon'ble High Court of Delhi in the case of Ghanshyam Vs. Delhi Metro Rail Corporation 2007.

Question 6 - Can accumulation be reduced to less than 45 days, as per pre-defined Company Policy

Answer - For the state of Maharashtra Leave Accumulation has been limited to 45 Days. Reducing leave accumulation is a good idea, but there is no expression in the Act reducing the number of Leave Accumulation. To practice this company must have an approved or certified Standing Order & acknowledge correspondence must be shared to the labour department u/s 9A of Industrial Disputes Act.

Question 7 - Can we keep a rule in leave policy saying only a specific no of annual leaves need to be carried forward to the next year the balance needs to availed for employee well being

Answer - This question is kind of a replica of no. 3 & 4 from our past mail on this. Worker is free to enjoy his/her earned leave, employer can't put any nakel to it's right to enjoy leave. 

Statutory Provision Exhibit below

Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017

Chapter IV - Leave with Pay and Payment of Wages

Section 18: Leave

(1) Every worker shall be allowed a weekly holiday with wages.

(2) Every worker shall be entitled to eight days casual leave with wages in every calendar year which shall be credited into the account of the worker on a quarterly basis, but shall laps if unavailed at the end of the year.

(3) Every worker who has worked for a period of two hundred and forty days or more in an establishment during a calendar year shall be allowed during the subsequent calendar year, leave with wages for a number of days calculated at the rate of one day for every twenty days of work performed by him during the previous calendar year.

(4) Subject to the provision of clause (3) every worker, who has been employed for not less than three months in any year, shall for every sixty days on which he has worked during the year be allowed leave, consecutive or otherwise, for a period of not more than five days.

(5) Every worker shall be permitted to accumulate earned leave upto a maximum of forty-five days. 

(6) Where the employer refuses to sanction the leave under sub-section (3) which is due when applied fifteen days in advance, then the worker shall have a right to encash leave in excess of forty-five days: Provided that, if a worker is entitled to leave other than causal and festival leave under this section, is discharged by his employer before he has been allowed the leave, or if, having applied for and having been refused the leave, he quits his employment on account of retirement, resignation, death or permanent disability, the employer shall pay him full wages for the period of leave due to him.

(7) A worker shall be entitled to eight paid festival holidays in a calendar year, namely, 26th January, 1st May, 15th August and 2nd October and four such other festival holidays as may be agreed to between the employer and the workers as per the nature of business, before the commencement of the year. For holiday on these days, he shall be paid wages at a rate equivalent to the daily average of his wages (excluding overtime), which he earns during the month in which such compulsory holidays falls: 

Provided that, the employer may require any worker to work in the establishment on all or any of these days, subject to the conditions that for such work the worker shall be paid double the amount of the daily average wages and also leave on any other day in lieu of the compulsory holiday.

(8) For the purpose of sub-section (3),—

(a) any days of lay-off, by agreement or contract or as permissible under the model standing orders or standing order certified under Industrial Employment (Standing Orders) Act, 1946;

(b) in the case of a woman worker, maternity leave as provided for in the Maternity Benefits Act, 1961;

(c) the leave earned in the year prior to that in which the leave is availed; or

(d) the worker has been absent due to temporary disablement caused by accident arising out of and in the course of his employment, shall be deemed to be days on which the worker has worked in any establishment for the purpose of computation of the period of two hundred and forty days or more, but shall not earn leave for these days.

(9) The leave admissible under this section shall be exclusive of all holidays whether occurring during or either at the end of the period of leave.

(10) Every worker shall be paid for the period of his leave earned under sub-sections (3) and (4) 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.

Do share your feedback on the advisory provided, if at any given point, there is any doubt or not lucid, kindly write back to us for further elucidation. Shall be pleased to meet your requirement.