Labour Laws & Ir
Human Resource And Industrial Relations
Raju Aggarwal
Assistant Manager Hr & Admin
Senior Hr Professional
[email protected]
Hr Consultant
Senior Hr Manager
Human Resources Officer

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We are a service company with most of our workers covered by Shops & Establishments Act. The company's certified Standing Orders have provided 6 days of Casual Leave and 6 days of Sick Leave per year. The workers are also covered by ESI and therefore have sick leave paid by ESI, of course as per ESI rules.

We are calculating the absenteeism percentage (as one of the HR indicators) excluding the Earned Leave, Casual Leave and Sick Leave (paid by the company) from the absent days.

Our being an MNC, our principals abroad accept exclusion of EL (and other leave such as unpaid long leave authorised by the company and maternity leave not paid by the company etc.), but do not agree that CL / SL be excluded from absent days. They treat EL a equivalent to the annual leave existing in their country, but do not see CL in the same way.

I know that absent days means the days on which the employee is absent and therefore CL / SL is absent day.

But, for the pupose of measuring absenteeism, is it proper to include CL / SL as part of your % Absenteeism? Or, show the effect of CL / SL on absenteeism separately instead of showing it in your regular indicator.

(If you have 12 days of CL in your company, then for sure you have 12 days of absence per employee out of the annual working days. Knowing that it is a permanent feature unavoidable and uncontrollable, is there any point in including this in the indicator and get lost as to the actual controllable quantum of absenteeism?

What is the practice in Indian Companies?

Can I please have some views and facts about practices here?

Thanking in advance,

With Regards,


From India, Madras
Hi Goverdhan,
In my view, sick leave and casual leave to which your employees are entitled with full pay, as per the standing orders ,ought to be excluded from the perview of absenteesm. These are the days on which an employee is authorised to be away from work on pay. It would be inappropriate to term it as absenteeism.
Absenteeism is defined as an absence of a worker from work when he is scheduled to work and work is available for him.
While calculating the percentage of absenteeism, we always exluded the days of authorised absence from work.

From India, Nagpur
Dear All, How do we calculate Absenteeism percentage? Do we include CL, PL SL etc?or is it only LWP(leave without Pay) Regards, Sunaina
From India, Chandigarh
Dear Govardhan,

If you go through ESI you will see that it is not proper to give SL to employees who are covered by ESI.

I had faced a similar problem earlier and what we did was to club all the Leave under one head. There was no SL or CL.

The Rules for Earned Leave was also changed and only Leave taken for LTA purpose was done in tune with Income Tax Act.

There is nothing illegal because none of the Act talks about CL or SL. The only legal leave as per law is EL so your Employer logic of putting them under absenteeism cannot be discarded completely.

Just tell me if they ask you which Act makes provision that CL or SL entitlement is there for workers. To be honest there is none except if you have a Certified Standing Orders which have included CL and SL.

Even under ESI, you treat the days as Absent in case of Sickness Benefit(Recall the Form you have to certify where you state the employer did not pay any wages for the period).

So, I feel you should club all the leaves together and put it under EL. Once EL increases your Employer will raise the issue and there you can fight your case out.



From India, Thane
Dear Swastik,

Thank you for your response.

The Tamil Nadu Shops & Establishments Act under Chapter VI on Holidays with wages stipulates that -

(1) Every person employed be given 12 days of holidays with wages after 12 months of continuous service;

(2) Every person shall also be entitled during his first 12 months of continuos service and during every subsequent 12 months of service (a) to leave with wages for a period not exceeding 12 days on the ground of any sickness or accident sustained by him and (b) to casual leave with wages for a period not exceeding 12 days on any reasonable ground.

So, it is legally mandatory to provide CL and SL in addition to EL (or PL) for the employees covered under the Shops & Establishment Act. I do not know about the Shops & Establishment Acts of other states, but this is the situation in Tamil Nadu.

If the establishment is covered by Factories Act only, then the question of CL / SL does not arise.

So, it is not prudent to club all the leave under the EL head, if the employees are under S&E Act.

In fact, we made use of the term 'not exceeding' that quantifies the CL / SL in the TN S&E Act to give 6 days of CL and 6 days of SL. The Certifying Officer could not raise objection because the employees are also covered by ESI and therefore he had effectively considered that we give 12 days of CL and ESI pays for sick leave.

In the absence of ESI cover, it is quite likely that the Certifying Officer insists for 12 days of CL + 12 Days of SL + 12 Days of EL.

Can you please give me some idea about what is the leave rule under S & E Act of your state?



From India, Madras
Dear Govardhan,
Since, S&E Acts are essentially State Acts it does vary from State to State.
If TN S& E Act provides for CL & SL then you cannot take it as absenteeism per se, but yes we did do a different thing with CL and SL.
While making list of Absenteeism we also included the following category of employees:
1) Intermittent Sick Leaves: Employees who use to take one or two days leave at regular intervals (Less than two days did not require a Doctor Certificate and we were exempted from ESI).
2) Clubbed Leaves: People who use to take SL clubbed with Holidays and/or Earned Leaves.
3) Leaves to Evade Work: People who availed CL/SL at times when some heavy work were scheduled to be carried out.
Here we would like to mention that since there was a Multi Union atmosphere it sometimes became difficult to refuse CL and SL.
I personally feel that you may suggest some creterion while including SL and CL as above.
Hope it helps.

From India, Thane
This is amazing, I never knew how diverse Leave was,
In Australia its very different and in many companies Sick Leave is paid regardless of how many days you take per annum, for example in our Banking Industry three of the main banks pay unlimited sick leave!

From Australia, Sydney
Hi Suneeta, The new employee must cover ESIC benifit with in seven Bussiness days from his joining date. These seven days for watching the person will work stable or not. Reg, B.Mohan Kumar
From India, Madras
Hi Seniors, Kindly let me know about leave with wages under shop act (Rajasthan) and Factories act, weather any provision of CL or SL under aforesaid acts.
From India, Ghaziabad
Dear Sir, Kindly clear one dought that how many earned leave can be carryforword as per shop & establishment act?
From India, Gurgaon

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