Does Companies have to encash leave upon resignation? Is it a law? If it has been a practice in the company rather than a written policy, can we determine a different approach of setting a max cap for a particular staff? We allowed for grandfathering of leave for a year during an acquisition agreement and now he has 50 days leave unused and was supposed to be forfeited should he have continued to work.
Company has to encash leave to employee who is resigning unless: (i) the employee absents himself from work without permission or reasonable excuse for more than 20% of the working days in a month or year, or (ii) the employee fails to take his leave within 12 months after the end of 12 months of continuous service.
There is no statutory minimum leave for seamen, domestic workers, or employees in managerial or executive positions. For regular employees covered under employment act, minimum 7 days with 1 additional day per year, up to a maximum of 14 days. As for maximum capping of leave for employee, it depends on the employment contract and the Company’s leave policy.
