Are Our Company's Work Hours and Leave Policies Legal? Seeking Clarity on HR Rules

Dear Seniors,

Yesterday, I heard that according to the Shops and Establishment Act and Factory Act, an employee should receive a minimum of 12 SL/CL and at least 15 PL. Additionally, I learned that an employer cannot require their employee to work for more than 48 hours in a week, meaning 8 hours per day on average. If an employee is asked to work for 9 hours for 5 continuous days, they have the right to only work for 3 hours on the 6th day. Moreover, if an employee works beyond their shift time, the employer must pay double the salary for the extra hours. Now, my questions are:

1. Are the above-mentioned statements true?
2. If yes, is there a provision for granting 12 PL (Vacations)?
3. Can an employer schedule a 9-hour shift per day (6 days a week) regularly?
4. Can an employee take any action against my company's policy?

Please provide clarity on this matter as my company offers 10 national holidays, 12 Vacations, and 6 Sick days. The current shift timing is 9:30 am to 6:00 pm (with a plan to change to 9 am to 6:30 pm). There are no other leaves such as maternity leave or study leave. Moreover, there is no policy for compensatory time off if an employee has to work on their week off for office-related tasks.

It would be greatly appreciated if you could elaborate on the minimum leave policy, working hours, weekly offs, and other mandatory requirements for the company.

Kindly assist as our company's policy is set to be implemented soon.

Thank you.

Dear Mannat,

This is not only the case of your company, but this is the scenario of every organization. However, the best thing that can be done is to seek help from the higher authority and encourage everyone to discuss this with the employer. Make sure that you are not the only one; involve everyone and ask all employees to address the issue. If they still do not agree, you have every right to take severe action and let them face the consequences.

Hi Bhawna,

Thank you for your reply.

Yesterday, I was sitting with my senior management to prepare this policy. I have offered a few other benefits for employees, but they are not agreeing to them. I have informed my seniors that what I am proposing aligns with standard industry norms, but they have denied it, stating that it would be like creating a new industry. Now, I just wanted to know if my company policy is ethically correct. I don't believe that this policy would make any employee happy or willing to work. After discussing with senior management, I spoke with a few senior employees in my company, and they are also not pleased with it. They mentioned that according to this policy, any employee could take action against the company as it is their right under the Shops and Establishment Act.

I am completely confused about what to do. We have very few employees in my company, around 12, including the directors, CEO, and all. The employees are requesting mediclaim and PF as well. Now, I am unsure about how to resolve this situation.

Please help.

Dear Seniors, please reply to this. Also, please let me know that we are a Service Providers Company. So, which act would be applied to our company? Shops and Establishment Act or what?

Dear Mannat,

Your statement given above is absolutely correct. You will be covered under the Delhi Shops and Establishment Act. The leave which you have mentioned in your statement is also accurate.

The answer to your first question is yes. The answer to the second question is no. The answer to question 3 is yes, but the working hours should not exceed 9 hours per day and 48 hours per week.

The answer to question 4 is yes. Now, regarding shift working from 9:30 to 6:30, the management can implement this for all six days, but there should be a one-hour break for lunch.

As per the Delhi Shops and Establishment Act, the spreadover can be up to 12 hours every day, but the actual working hours should not exceed 9 hours per day and 48 hours per week.

Thank you,
J S Malik

Hi Malik,

Thanks a lot for your reply. Please tell me one more thing: what other provisions are included in the Shops and Establishments Act that are mandatory for all companies? In other words, what facilities or benefits must an employer provide to an employee as per the law?

Dear Mannat,

If any organization has 20 or more employees, the organization should pay PF. So your organization has only 13 employees. Therefore, your organization is not covered under the PF act. If you wish to provide medical insurance to your employees, you can offer that as part of welfare activities.

Regards,
Srihariraju

Hi,

Please let me know if my company policy is correct as per the Shops and Agreement Act. As per my company policy, all employees are entitled to 12 vacation days, 6 sick leaves, and 10 national holidays. That's it... No other leaves or benefits are provided. Even if an employee is asked to work on their week off day, the company will not provide any extra time off. I will discuss mediclaim with them. Please advise on what is mandatory for an employer to provide to an employee. If we implement the above-mentioned policy, what harm could it cause to my company? I would like to understand how many leaves an employee should be entitled to, the required working hours, the number of national holidays to be given to the employee, and so on.

Please suggest. I am waiting for your guidance and suggestions.

Mannat,

The companies usually give 12 hours of vacation and 6 hours of sick leave. If you wish to provide additional benefits to the employees, you may consider introducing comp time off for the employees. For example, if an employee works on a Saturday and does not have a holiday, and then works on a Sunday, they should be entitled to a comp day off. You can discuss with your supervisor the number of hours of work that would earn an employee a comp day off. This initiative not only motivates the employees but also contributes to the organization.

Please let me know if you need any further assistance.

Hi,

Please let me know, is my Company Policy correct as per the Shops and Agreement Act? According to my company policy, all employees are entitled to 12 vacations, 6 sick leaves, and 10 national holidays. That's it. No other leaves or benefits are available. Even if an employee is asked to work on their week off day, the company will not provide any extra time off. I will discuss mediclaim with them. Please advise on what mandatory benefits an employer should provide to employees. If we implement the abovementioned policy, what harm could it cause to my company? I want to understand how many leaves an employee should be entitled to, working hours, national holidays, and so on.

Please suggest.

Waiting for your guidance and suggestions.

Hi,

In your case, let the company introduce the policy. A weekly off is necessary, but if an employee works and does not receive benefits, do you think they will continue working on weekends or late in the evening? The same situation occurred in my last company, where there was a system of paying extra for overtime or working extra days, but then management removed it, and no perks were given. The result was a queue at the punch machine right at the end of the day. No one was willing to stay late or work on weekends, and important work suffered many times. After one month, I provided this information to management and suggested compensatory time off of half a day for around 4 hours of extra work, with additional hours entitling to a full day off. This is necessary as employees cannot be treated as machines, and even machines require rest. Employees have families at home and are social beings.

My suggestion was accepted.

Regards,
Meghal

Dear Mannat,

With reference to your queries on the working hours and overtime, you have to follow the Factories Act. An employee shall not work for more than 48 hours a week, but you can still apply for an exemption from the Inspectorate of Factories by submitting a specified form. You may refer to the exemptions under the Factories Act and proceed accordingly.

All time and attendance sheets should be filled out according to the factory rules, and registers have to be maintained accordingly.

If you wish to receive certain suggestions to help you with your daily functions, please provide your personal email ID. Certain information cannot be shared on the website.

Regards,

Saravana Kumar K
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Friends, jab itni baat chal hi rahi hai, to ek doubt mera bhi clear kar do. If these work hours of 48 hours is only applicable for executives to senior management or if it's also the same for guards, reception, and other facility people.

Dear Members,

I have already informed the higher management about the working hours. I told them that if an employee works on their day off, they should receive extra time off or something similar. However, they mentioned that no one would request additional time off. We have hardworking employees in our company. I explained that currently, we have a small team, but as our company expands, the number of employees will also increase. Nevertheless, they stated that they would not hire individuals who do not consider office work as their responsibility.

I then emphasized that everyone requires rest, and it is their right to receive extra time off if they are asked to work on their day off. They responded by saying that they do not expect employees to come in every weekend, but if the workload necessitates it, the person will be required to work. Employees are approaching me with the same concerns, and I am unsure how to respond... :(

Additionally, I am new to this company, and I feel unable to challenge their decisions.

Please help. I am seeking a simple suggestion that resolves the issue effectively.

Thank you.

Mr. Mannat,

Hi. I am an outsider and greatly appreciate Mr. Malik's response, but would it not be appropriate if you skim through the act yourself? I am sure it will give you more confidence to deal with the problem.

As far as Mr. Malik's concern, he is a thorough GM and professional.

Regards

Dear Mannat,

Yes, it is mandatory under the Delhi Shops Act to provide at least 12 CL/SL and 15 PLs (05 PLs to be credited on completion of every 04 months). However, you can create a policy in this regard and clearly specify that 05 PLs will be credited in the months of April, August, and December as per the calendar year, i.e., January to December.

Regarding extra duties, it is specified that for every extra hour of work, the employee is entitled to receive double wages for each additional hour. You can draft a memorandum of understanding (MoU), which is a mutually agreeable contract, with your workers clearly stating that management is willing to pay the same rate of wages per hour as the worker is already receiving as part of their monthly salary. (Some judgments of Hon'ble Courts have also supported this).

The Shops and Establishments Act also states that a worker should not be allowed to work for more than 50 hours overtime in a month.

It is advisable to speak to your immediate superior and make him/her aware of the legal consequences and the financial impact applicable to this. Drafting a policy in this regard will help you to smoothen and strengthen industrial relations in your organization.

Thanks,
Amit Gera

Dear Members,

Is there any book on the Shops and Establishment Act available in the market? If yes, please let me know. Otherwise, please provide me with the soft copy of the same.

Dear Mannat,

Other than the above-discussed leaves, there are a few more leaves which are compulsory. They are:

Maternity Leave (ML):
Every female employee is entitled to ML for a maximum of 12 weeks of paid leave (including weekends & public holidays) as per the terms of the Maternity Benefit Act, 1961.

Paternity Leave (PaL):
A male employee is eligible for Paternity Leave for the birth of his child for up to 5 working days.

Adoption Leave (AL):
A female employee is eligible for Adoption Leave for 1 month (inclusive of weekends & public holidays) when she legally adopts a child. Similarly, a male employee is eligible for Adoption Leave for 5 working days.

Regards,
Jayson

Hi,

Thank you very much for your reply. Please let me know if there is any book on the Shops and Establishments Act available in the market!

Regards,
Mannat

I understand that Leave Calculation is based on Basic Salary. The formula is as follows: Basic Salary * Number of days of leave / 30. Please correct me if I am wrong.

Regards,
YL

Dear Mannat,

As you have asked, the Delhi shops and Establishment Act book can be obtained from Universal Book Depot at the backside of Tis Hazari Court, Universal Book Depot in Connaught Place, or Jain Book Depot in CP. For any other law book depot, please let me know.

Thank you,
J. S. Malik

Dear Mannat,

For an IT company, the Shops and Establishment Act is applicable. For a factory, the Factory Act applies. Leave is always a critical issue. A company cannot refuse maternity leave if the employee belongs to the organization before conceiving. The day the employee conceives, it is the duty of the employer to treat the employee in a humane way.

Thanks and regards,
Pranab Chakraborty

Hi, I am Deepesh K. Surana. I am a student, currently pursuing my MBA in HR. I was taught that:

Basic Salary * Number of days Leave / 26
and not
Basic Salary * Number of days leave / 30

Please correct me if I am wrong.

Thanks

Certainly! Here is the revised text with the corrections made:

Need to know the difference between Show Cause Memo and Charge Sheet and what circumstances these methods can be adopted.

---

Hi!

I can help clarify the distinction between a Show Cause Memo and a Charge Sheet, as well as the circumstances under which these methods can be utilized.

A Show Cause Memo is typically a formal written notice that is issued to an employee, requiring them to explain or justify certain actions or behaviors that are of concern to the organization. It is usually the initial step taken by an employer to investigate an employee's conduct or performance-related issues.

On the other hand, a Charge Sheet is a more formal document that outlines specific allegations or charges against an employee. It is often used in more serious disciplinary proceedings and is a precursor to a formal inquiry or disciplinary action.

The decision to use a Show Cause Memo or a Charge Sheet would depend on the severity of the issue at hand and the organization's internal policies and procedures. Show Cause Memos are generally used for less severe infractions or as an initial warning, whereas Charge Sheets are reserved for more serious misconduct cases.

If you need further clarification or have specific scenarios in mind, feel free to provide more details for a more tailored explanation.

I hope this helps!

Dear Manata,

Please find enclosed the best HR policy. You can download it and also apply or modify it as needed.

Manoranjan
9873382895

Dear Manat,

An employee who has 2 years with the organization can avail 12 weeks of maternity leave for her 1st child. In case of illness or complications arising out of pregnancy, the employee is entitled to a maximum of one month leave over and above the 12 weeks of maternity leave on producing the required Medical Certificate. In case of the delivery of the 2nd child, the employee can avail 12 weeks of maternity leave, but it will be treated as "Leave without Pay".

Manoranjan

Hi,

Interesting topic going on... Can anyone give me the HR policy of any Indian (Delhi preferably) Company in which Shops and Establishments Act has been applied?

Thanks,
Shweta

Hi Shweta,

Please let me know as well once you get it. Dear Seniors, it would be great if anyone can provide any HR policy of any company that is under the Shops and Establishment Act.

Regards,
Mannat

Dear Mannat,

1) You can arrange for a medical and group accident insurance policy for your employees.
2) You can think about ESI and PF after growing to 20 employees because it is not mandatory for 12 employees, and your top management will not agree to it either.
3) Other benefits like safety and health measures are mandatory for any organization.
4) Personally, I suggest one thing. Try to avoid discussing these matters with other employees. It may sometimes reach the ear of top management and affect your career growth.
5) Especially when working in a startup, you should be very careful, honest, and give your best to learn many good things in the industry. Your main objective should be learning, learning, and learning only.

Regards,
Priya.

Regarding the HR policy, I hope people have already sent the link. You can refer to it and prepare your policy that suits your organization.

Regards,
Priya.

Dear Mr. Sri Hariraju,

Regarding the recent amendment, if an organization has 10 or more employees, the employer should remit the PF.

Vijay

Dear Mannat,

I hope your organization is in its initial stages with less than 20 employees. As a service provider organization, you fall under The Shop & Establishment Act, not the Factories Act.

You can refer to The Shop & Establishment Act book available at any bookstore that sells statutory forms and books. Familiarize yourself with and adhere to all the provisions of the act along with the rules set by the respective state government.

However, you need to persuade your management to comply with the law by emphasizing that labor laws only offer minimum rights to workers, and as a responsible citizen, it is the employer's duty to follow them.

Leave regulations differ between the Shop & Establishment Act and the Factories Act. Generally, national and festival holidays are not covered under leave regulations. There exists a separate act known as The National & Festival Holidays Act, along with rules established by the respective state government, which dictate these mandatory annual holidays.

I trust the information above proves helpful to you.

Regards,

arlkrishna

Hi,

1. Is the above-mentioned statement true? [YES]
2. If yes, then is there any provision to give 12 PL (Vacations)? [You can treat this as Privilege Leave, you earn 1 leave for every 20 working days, which comes to around 1.5 days per month.]
3. Can an employer make a 9-hour shift per day (6 days in a week) daily? [YES, 9 hours can be there provided you have a 1-hour lunch break, making it only 8 working hours.]
4. Can an employee take any action against my company's policy? [They may, but it's not likely as of now. Just increase your vacations and call it PL.]

Please clarify this problem because in my company, there are 10 national holidays [This is right; you have 5 national mandatory offs & 5 festive offs that the company can choose from the long list], 12 Vacations [make it 1 for every 20 working days], and 6 Sick [make this 12 SL for the calendar year]. Shift time is 9:30 am to 6:00 pm (the company is planning for 9 am to 6.30 pm) [you need to work 8 hours per day!]. No other leaves are there like maternity leaves, study leaves, and all - [That's ok; only maternity leave is as per law - 12-week leave in total with pay if the woman has worked a minimum of 80 working days prior to maternity leave]. Also, there is no thing that in case an employee has to work on their week off (for office work) then the employer will not be giving an extra/compensatory off - [if the work hours are 48 hours, it won't be paid. 1 weekly off per week is a must, then compensatory offs are not required.]

Hope this helps.

Regards, Parmita

In my company, there is a concept of CL and SL. There is only PL available, and one day is also counted as PL. The Act allows the employer to make decisions on this matter. It seems that IT has diluted the spirit of the labor law.

Hi,

If employees are demanding PF, please explain to them that the employee strength should be at least 20 to register with PF.