Scenario-if the employee is having cl for 10 days....
if he is trying to apply leave more than 10 days ...system should throw an error message
possible config steps in IMG
You could also set the maximum absence and attendance duration in table T554S.
Best approach is to create quotas and use the functional limit in combination with table T559P or use types an constants.In both cases rules have to be written to handle this..
similar scneario is discussed in
http://www.sd-solutions.com/SAP-Payroll-Time-Man.html
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