Can Proprietorship Firms Deny Leave During Probation and Cut Salary? Seeking Legal Insights

Hi,

I have a friend who is working in a Proprietorship firm. He is on probation for a period of 6 months and he requires leave for a day for some personal reasons. He has been told that he can't avail leave during probation and that his salary would be cut. Is there any law governing such policies? Being a proprietor firm, do they come under labor law? Is such a salary cut acceptable?

I got to know through someone that any person who works for 20 days has to be granted a day's leave. Is this true?

Regards,
Anuradha

Hi,

Leave for an employee is a subject covered under either the Shops & Commercial Establishments Act of your state or the Factories Act. What you have been told is largely okay for the Factories Act and not for the other act.

There are various types of leaves that an employee may be eligible for, e.g., Sick Leave, Casual Leave, Earned Leave, Paid Holidays, etc. Of these, only earned leave is provided for in the two acts mentioned above. The basic provisions are as follows:

Under the Shops Act, an employee earns Earned Leave at the rate of five days for every 60 days worked with an upper limit of 21 days in a year. Under the Factories Act, an employee earns Earned Leave at the rate of one day for every 20 days worked. The manner of computing the "days worked" is explained in the acts, but we need not delve into these details right now.

Of all the leaves, while the employee's leave account is credited at the beginning of the year for Sick Leave and Casual Leave (because they are part of the terms and conditions of employment) alongside legal benefits, the Earned Leave is credited at the beginning of the year for the leave earned during the past year. This applies to both acts.

Therefore, granting Earned Leave to an employee while on probation is simply out of the question unless the employer has rules otherwise! Other types of leaves are also credited only after successful completion of the probation period, i.e., on being confirmed, because it is not certain that a probationer will necessarily get confirmed, and employers do not wish to be extraordinarily generous too early in the association.

However, as good management practice, many employers grant leave during probation if satisfied with the reason and debit the leave account when the employee earns it.

I trust you have got all your answers. If you need more clarification, put a message on the board!

Regards,

Samvedan

July 31, 2006

Dear Anuradha,

The applicability of any Act generally depends on the status of the employee. If your friend is in the Management Cadre, then he/she will be guided by his/her terms and conditions of employment and is excluded from coverage in most cases.

So, the employer has every right to disallow leave during the probation period. It is up to the organization to adjust leave.

I must add something here: it is not wrong for the employer to deduct salary because usually a probationer has to work for 6 months (or the probationary period), i.e., 26 * 6 (period of probation) = 156 days less declared holidays.

In organizations where there is Seniority cum Merit or seniority-based promotion is prevalent, the date of confirmation becomes very important for the matter of seniority. Hence, these organizations usually do not allow any leave during the period of probation. This not only applies to employment probation but also during Promotion Probation (when a person is promoted).

Kind regards,
SC