Leave Encashment Policy Companies

Sample Leave Encashment Rules & Regulation as per Salary in India




These rules are framed and adopted for the benefit of the Employees of Rocket Sales Ltd., whose names appear on its Master Roll.


For the purpose of these rules, the employees of the Company are categorized as below:

a)    Managerial Staff drawing basic/consolidated      :    Category - 1
     salary @ Rs.60000/- or more per month

b)    Managerial & Administrative Staff other than     :    Category - 2
those referred to in (a)

   2.    DEFINITION :
i)             Basic salary shall not include any other allowance, benefits of the perquisites.

ii)            “Family” in relation to a staff member means –

a)    The spouse and children of the staff, and

b)    The parents, brothers and sisters of the staff or any of them, wholly or mainly dependent on him.

                                LEAVE RULES

                                   PART – II


·        Category 1 and Category 2 employees shall be entitled to privilege leave at the rate of 20 (twenty) days with pay for every completed period of twelve months or on prorate basis.

·        Employees shall not be allowed to avail any privilege leave during their probationary period, it will, however, accrue and be credited to their account, but they will not entitle to avail or take benefit out of the same upon confirmation only, unless the management at its sole discretion for any special reason otherwise decide. But no such staff member will be entitled to claim it as a matter of right.

·        Privilege leave will be credited to the account of each individual staff member twice in a financial year.

·        Ordinarily, the privilege leave shall be granted only twice a year at the discretion of the management, but in exceptional circumstances like marriage, death of near relatives, sickness, etc. it may be granted even beyond the schedule at the sole discretion of the management.

·        If privilege leave is offered by the Company, whether applied for or not, and the offer is not availed by any staff member he will forfeit his leave to the extent of the period offered. 

·        Privilege leave will be allowed to be accumulated upto 240 days.

·        Privilege leave in excess of 240 days will be automatically encashed and paid to staff members by the management. 

Every staff member will be allowed 10 days leave with pay in a year. A person who joins service during the currency of any year, will be allowed casual leave on prorata basis.

Casual leave may be granted upto 3 days at a time.

Prior sanction for casual leave will be essential except in case of emergency.

This leave shall be non-cumulative and non-encashable.


Subject to that is stated in sub-clause (ii) hereto, sick leave upto maximum of 7 days in a year will be allowed to every employee except those covered by the Employees State Insurance Act,1948 as in force from time to time on production of a certificate by the registered medical practitioner. The management shall, however, have the right to verify the fact if such sickness by any reasonable means including examination by company’s own Medical Reference and the staff member shall have to present himself for such examination.

Employees covered by the Employees State Insurance Act, 1948. as in force from time to time shall be entitled to benefit as stipulated by the Act.

This leave shall be non-cumulative and non-encashable.


Leave without pay may be granted at the discretion of the management in exceptional cases, but only when there is no privilege leave outstanding or be due to the staff members concerned.

When any staff member is on leave without pay, he will not be entitled to any allowance also for the period of absence.


Every leave except sick leave shall be granted at the convenience of the management and nothing will preclude the management at it a sole discretion to refuse, revoke and/or cut short the leave period and ask the staff member to report immediately as the exigency of the company’s work may warrant.

Any Sunday or holiday falling at the beginning or at the end of the leave period or both, shall not be counted as part of the leave period. However, any Sunday or any other holiday including Saturday, whether applicable, falling between the first and last day of the leave period, shall be counted as part of the leave taken.

Ordinarily, every application for leave shall be made in writing in a form prescribed by the company and sent to the sanctioning authority within the time limit below :

Privilege Leave
30 days before the applicant intends to proceed on leave

Casual Leave
Working day before the applicant proposed to avail the leave, or in emergency cases, on the day of resumption of duty.

Sick Leave
Within 24 hours from the time of sickness or accident.

Absence without prior permission of the competent authority, except as stated above, shall amount to misconduct and be liable to severe disciplinary action.

Staff member going out of station on leave shall have to obtain prior approval of the competent authority and shall leave behind his full address of the outstation where he intends to stay during leave period.

Over staying beyond the sanctioned leave period for more than eight days without prior intimation to any approval of the competent authority will be treated a break of service and his services may be terminated on that ground without prejudice to other rights of the management as per laws & rules and/or mutual agreement.

For the purpose of determining leave entitlements, any period of absence on the following counts shall count as service period :

Privilege leave

Casual leave

Sick leave

Absence during training period if sent by the company.

Outside duty and/of touring for company’s business.

The period of absence on any other count including leave without pay, would not be counted as service period and the leave entitlements shall be reduced proportionately.


Dated – 01/04/2013                                                     (Amit Jain)
                                                                                       President - HR


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