Leave encashment eligibility as per delhi s&e act...

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 March 2015 Dear Frine of my friend left the service after spending ariund 15 Years in an establishment. please suggest upto what extent he would be eligible to claim his earned leave if his establishment is covered under Shop & ^Establishment Act in NCT of Delhi....As per companies Policy employees are eligible to avail 25 days of EL each year & part thereof.

Is he only eligible for only upto a maximum of 45 days of leaves as per Rules prescribed under S&E Act in Delhi ??

Awing for your prompt suggestions

Thanks in Advance

Querist : Anonymous

Querist : Anonymous (Querist)

07 May 2015 Pl revert with your opinion.....

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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02 August 2024 In the National Capital Territory (NCT) of Delhi, the eligibility for leave encashment under the Shops and Establishments Act and the specifics of leave encashment policies can be understood as follows:

### **Leave Encashment Under Delhi Shops and Establishments Act**

1. **Shops and Establishments Act (Delhi)**:
- Under the Delhi Shops and Establishments Act, 1954 (which has been updated over time), the leave provisions are typically as follows:
- Employees are entitled to annual leave with pay, and the accumulation of leave days is regulated by the Act.
- Generally, the maximum number of leave days an employee can accumulate is around 45 days, but this can vary based on specific rules or amendments.

2. **Leave Accumulation and Encashment**:
- **Accrued Leave**: According to the Act, employees can accrue leave over time, and the maximum leave accumulation may be capped.
- **Encashment at Termination**: When an employee leaves the service, the accumulated earned leave is typically encashable as per the policy of the establishment, provided it does not exceed the maximum limit set by the Act.

### **Company Policy vs. Act Provisions**

1. **Company Policy**:
- Your friend's company policy allows for 25 days of earned leave (EL) per year. This is quite standard, and the policy would govern how leave is accrued and managed within the company.

2. **Limits Imposed by the Act**:
- Even if the company's policy is more generous, the Shops and Establishments Act's cap on encashable leave would apply if it is stricter.

### **Calculation for Leave Encashment**:

1. **Accrued Leave**: If your friend's company follows the Delhi Shops and Establishments Act strictly, he would be eligible to encash up to the maximum limit set by the Act, which is usually 45 days, even if he has accrued more leave under the company's policy.

2. **Policy Limits**: If the company's policy permits encashment beyond the statutory limit, your friend might receive more based on the company's policy. However, the statutory cap would be the minimum that must be honored.

### **Summary**:

Based on the Delhi Shops and Establishments Act, an employee can generally accumulate and encash up to a maximum of 45 days of earned leave. Since your friend has worked for about 15 years, he would typically be eligible to encash up to this statutory limit unless the company's policy provides for a higher limit. Therefore, if the Act’s limit is applicable, he would be entitled to encash a maximum of 45 days of leave, subject to any additional provisions by the company’s leave policy.

For precise details and to ensure compliance with both legal and company policy, it is advisable for your friend to review the company's leave policy and consult with the HR department or a legal expert.

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