To Service Law experts:
In hyderabad, some companies are calculating the Earned Leave Enncashment as: (BASIC SALARY/26) * EL Days. Where BASIC SALARY is per month it is normally @30% of total salary in most private companies. EL Days are Earned Leave and are working days equivalent.
But I have gone thru the section 30 and 2(23) of AP Shops and Establishments Act
https://www.vsez.gov.in/app_doc/APGOS/ANDHRA%20PRADESH%20SHOPS%20AND%20ESTABLISHMENTS%20ACT1988.doc
From that it is clear that it should be = (full salary per month/avg working days per month) * EL Days. Our average working days per month is 22, as we work 5 days a week.
It seems like the company took some lawyer's opinion and that lawyer seems to have told that I am wrong and that if the gratuity is calculated using BASIC and the number working days per month for gratuity is used as 26 per month then what the company does is correct and legal [i.e (BASIC SALARY/26) * EL Days.]
Can someone tell me if I am reading the above sections wrong? I am a professional working in technology field & the company is a private company/US subsidiary)
Your considered thought and view on this matter is much appreciated.
Thanks
