Leave Carry-Over Policy - Is It Mandatory Under Leave Provisions Of Shop & Establishment Act?

Leave Carry-Over Policy - Is It Mandatory Under Leave Provisions Of Shop & Establishment Act?


yes, it is mandatory to carry forward the accumulated leave in the following year, but up to only 42 leaves.

Rest will get lapsed.on the other hand you just can’t compel the Employee to avail just for the sake of avoiding encasement of the leaves at the time of separation.beside this 42 is the minimum threshold decide by shop and establishment act.but many companies designed there policies in such a way that employee should discharge all his moral responsibility and operation of work flow smooth as well


Can there be a cap on the amount of leaves an employee can carry forward to the next year, say 10 or 15 or the law mandates that all balance leaves must be carried forward until the accumulated leave balance is upto 42 leaves?


Considering most organizations are still working from home, employees are not taking as many leaves as they normally do leading to accumulated leaves by the year end. How have organizations modified their leave policies to deal with this - any suggestions?


There is a wrong concept that taking leave means one has to travel. Leaves can be taken even while being at home to relax the mind and body from our daily official routines and spend some quality time with near and dear ones.

Many companies follow a process of providing mandatory leaves to its employees and depending on criticality of the role or responsibility, the number of leave days to be taken is also decided.

Apart from statutory leave carry forward rules, each company will have their own leave policy which dictates how many leaves can be carried forward each year. Several public organisations such as banks have no such limit or restrictions or have very liberal rules on leave carry forward policy. Employees approaching their retirement age would prefer to encash their unavailed leaves, as a lumpsum amount would help them financially.

Companies should seriously look at the current situation pragmatically and allow for accumulation of such unavailed leaves and perhaps stagger it over one or two years, thereby giving a great morale boost to its employees rather than lapsing it mercilessly.

After all, we say that employees are our assets, right?


It is the decision of each company, keeping the law limitations in consideration. Sometimes few days from the leave balance are made to lapse as per policy, to encourage better work-life balance-irrespective of the fact where a person is working from. It is important one takes breaks, rejuvenates sometimes. May be if not made to lapse, few may not take these much needed breaks.

It also depends on the culture an organisation wants to build.