Salary Deduction - Salary Reduction - CiteHR
Umakanthan53
Labour Law & Hr Consultant
Kishorkulkarni
Law Practice
Rameshbg_1955@yahoo.com
Retired Chief - Ir
Pratheekshaa
Senior Manager - Human Resources
Asiya Bano
Executive - Hr
+1 Other

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i want to know as per labor law and shop and establishment act do we deduct the employee salary if one have their leave balance
kindly tell me in which act it is written that it is illegal to deduct the salary if leave balance is there
Dear Asiya Bano,
The term " LEAVE" literally means permission and in employment context it denotes leave of absence from duty. It would therefore imply that the prior permission or sanction or approval of the employer for availing of leave is essential except the case of leave on medical grounds duly recommended by a registered medical practioner. In short leave is authorised absence from duty whereas availing of leave by an employee without intimation or prior sanction, though sufficient credit balance is available in his leave account, is unauthorised absence for which deduction from wages can be effected u/s 7(2)(b) of the Payment of Wages Act,1936.

Leave can be refused. It is not a matter of right. Deduction can be effected for unauthorised absence. But pls check concerned would have inform ed leave either to Supervisor or would have reached him through his colleague. It is not illegal to deduct salary.
Hi Asia Banoji,

If concerned HOD has been informed even thru phone, sms or HOD has appd. the leave and the employee has leave in credit, it cannot be treated as LWOP & deduction will be unfair & create problems for HR.

The facts & circumstances are not clear warranting deduction of leave when leave is available in credit. Pl. reveal the facts so that Members can offer suggestion to solve it.

I CAN provide Rules+ Formats for SHORT & LONG LEAVE, Extra Work - Co-Off –Regr.CoOff Appln., PL-Encashment Form, LWOP, M.B. Rules+ Forms of Notice, Claim for MB etc.

Most employees try to save Leave & they must save since that is what he’ll get - when he quit Co. When he suddenly go due to urgency & return after 3-4 days, how to adjust W/O. to save his W/O?

Today, HR Dept. is targetted for Not framing proper Rules.

I have setup HR Dept. Framed S.O, HR Manual, Leave & Service Rules & Formats for all HR Jobs in Soft-copy Pl. provide ur mail id to send dtls of 65 HR Forms & 150 Policies. U can.pay fee as per ur Cos.Policy. Pl.contact - [email]khanvsl_56@rediffmail.com- Ph: 09535470460

C.Neyimkhan -- 14.4.16

HR Consultant, Ex-AGM-HR&Admin. Ex-Member, NIPM, - Ex- Trainee-Member, IIM B;luru.

Languages Known:Tamil, Kannada,Telugu, Malayalam + English & Hindi

If the employee has abstained without intimation and/or approval of leave or the leave sought for has not been approved and non-approval intimated to the person; the employer has the right to deduct the salary for the absent days.
bgramesh, hosur

yes. you can deduct if the leave is unapproved. In any case if the leave is not approved by the immediate supervisor or hr you can treat it as loss of pay.
Dear Asiya Bano
Your question, I think is relating to the cases of absence without taking leave and then asking the Time Office to adjust the leave balance.
1. Firstly, let me clear that "cutting the days of absence" is not a "deduction" from Salary. Deduction has a specific meaning under PW Act and MW Act. We must call it "days of attendance are less" and salary paid is directly proportional to days of attendance. At least HR people should confuse with these terms.
2. Leave is right of employee but availing of leave is not a right of employee. So one cannot claim as right to remain absent and then to say adjust the leave balance.
3. The model standing orders do give us guidance regarding making leave applications and the sanctioning policy. It is the department priority which prevails leave sanctioning.
I hope the matter is clear.

I am really not yet cleared because i want to know that a person have their leave left i.e., 31 leaves but the employer is deducting the salary for the leave taken in the month is it legally authorised or not if not then do we have any legal laws for this in labour law as we are registered under shop and establishment
Dear ASIYA BANO,

Let me presume from your last post that the employee avails leave after application by him and approval from the employer and still the employer deducts salary for the leave taken in the respective month while there is sufficient credit in the employee's individual leave account.Such an act by the employer is certainly illegal. However, in my enforcement experience I have noticed a practice being followed in some establishments to which both the employer and the employees are active partners - Whatever leave due for the entire year, CL,PL and SL is surrendered for cash benefits once at the end of the year, and if any leave is taken subsequently, proportionate deduction is made from the salary. It is not a legally correct practice for it defeats the very purpose of leave benefits provided for in any particular Statute eventhough the arguments of payment of equal cash benefit and voluntary acceptance of the concerned employees are tactfully advanced. Leave provisions under various heads are incorporated in every establishment-oriented Labour Legislation only after critically evaluating the nature of work involved for the purposes of offering sufficient leisure from the monotony of work environment and enabling the employees to meet unforeseen necessity for leave of absence and discharging their social commitments as well. Such a practice amounts to contracting-out which is explicitly or impliedly prohibited in any Labour Law. IN any case,You can make a complaint personally or through your Trade Union to the enforcement authorities or the State Labour Commissioner.


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