Basis for Leave Encashment - paid basic or basic rate

[JLangenkaemper]

Dear experts,

hope you can throw some light on me and help me understanding the calculation of leave encashment in case of a suspension period before leaving action.

If person is suspended the complete month before leaving the company and gets a subsistence allowance of 50% for the time of suspension - on which basis the WT /128 should be calculated?

Basic rate (full monthly basic + DA)

-or-

paid basic + paid DA + suspension allowance?

-or-

something other?

Thank you very much in advance for your helpful input.

BR

Juergen

[BalaAP]

hi,

It depends on nature of suspension. If employee proves that he was not guilt, then he is fully payable. If suspension is part of punishment/disciplinary action (i.e - it is proved that, he was guilt), then, only the minimum component is paid (means, he was not eligible for any benefits). It depends on the company policies.

May please check the following link.

Entitlement of earned leaves under suspension

[JLangenkaemper]

Hi too,

thanks for first information.

Suspension is part of disciplinary action and it is that he was guilt. Payment of subsistence allowance during suspension period is not the issue. Also the entitlement of earning a leave during a suspension period is not to be asked.

But:

Earned leave days to be paid was earned within last year and should be encashed at the end of the employment (30.09.2014).

In the last month the person go just subsistence allowance of 50% of basic+DA. (5 lakh instead of 10 lakh)

What should now be the basis for calculating the leave encashment?

  5 lakh as per paid salary during suspension

  - or -

  10 lakh as per standard salary

Thanks for your valueable help.

Juergen

[BalaAP]

Hi,

1) Is it a Central Govt. Organisation / PSU / Limited / Pvt.Limited Company?

2) Is he terminated from the date of suspension ?

3) Is he attained the age of retirement?

regards,

Bala

[JLangenkaemper]

Hello again,

1) It is a Pvt.Limited Company.

2) He is terminated at the end of a period of suspension.

3) He has not attained the age of retirement.

regards,

Juergen

[BalaAP]

Hi,

Subsistence allowance is termed as a allowance which is paid for survival of an employee. His basic is not revised and updated in infotype 8 during his suspension period (if I am not wrong). Hence he is eligible for full basic+da in calculating EL encashment basis.

(Imagine, if that employee could have encashed his earned leave before his suspension, which will be of 100% of Basic+da).

Moreover, since the company is PVT LTD, it is up to the management's decision to settle his dues with appropriation. It depends on the wordings given in the termination order/recommendation and it's appropriate interpretation.

Regards,

Bala.

(May pls reward points if the answer is helpful).