Navigating Leave Policies: How Should I Handle Extended Sick Leave in a Small Company?

Hello All,

I am working as an Asst. HR Executive in my company, where we currently have a staff of around 15 employees. The company has not yet completed its first year of operation, and I have been in this role for two months. The management team is not very familiar with HR policies and terms.

My query pertains to our leave policy. I proposed providing one day of paid leave to employees each month, which the management approved. However, one of our employees has been on sick leave for more than half a month. I am unsure whether to count one day of paid leave for this extended absence when calculating his salary. Currently, there are no CL, PL, or SL provisions for any employees. If a person is absent for four days in a month, four days' salary will be deducted.

Thank you.

Hello Sir,

If this is your reply to me, then I got confused. Can you please clarify it with details?

Dear Sweta,

The quantum of leave to be given to an employee depends on two things, whether it is a factory or an establishment. I feel you might be in an establishment, then leave will be granted as per the shop and establishment laws of the particular state. If you explain in which state your office is located, then I can suggest the number of leaves to be given in a year. Of course, what you have suggested is less.

Thanks,
J. S. Malik

Hi Shweta,

It's mandatory that a company should provide SL and CL, but the number of leaves differs from company to company. In my company, we offer 6 CL, 6 SL, and 6 PL in a calendar year. So, what I would suggest is that you should give him the eligible SL in his credit (calculate from the date he joined the company) and the rest as LOP. But before all this, you should present this Leave policy to your management, and after receiving approval, you can implement it.

Hope this will solve your problem... :-D

Nancy

Since the company started functioning just one year ago, there is no question of employees earning any leave. If you come under the Factories Act and would like to go for leaves as per the law only, then your employees will be eligible for leave from the second calendar year (Jan 2009) onwards based on the number of days worked in this year. Every employee who has worked for at least 240 days will be eligible for leave at a rate of one day per 20 days worked. Those who joined during the year, for example, in June or September, will get leave prorated.

For continuous absence, whether to grant leave or not is at your discretion. However, it is common practice to mark it as 'leave without pay'.

Regards,
Madhu.T.K

Hi,

The paid leave is calculated for the month the employee has worked for the company. Any employee who works for a minimum of 15 days in a month should be eligible for calculating earned leave (EL). However, since the employee is already on Loss of Pay (LOP), he isn't eligible for the same.

Dear Sir,

For the purpose of considering the 240 days of work, shall we take the total completed days by an employee, i.e., the worked days + holidays + legitimate leaves taken if any + LOPs if any?

Regards,
Aakrit

Hi Shweta,

I believe Mr. Madhu and Mr. JS Malik have already suggested to you that the basis of earned leave (EL) is one day off for every 20 days worked in the last working year, as per the Factories Act 1948. Your company's total strength is 15, hence it does not fulfill the criteria of being an establishment as per the Factories Act 1948. Therefore, I would suggest that it is at our management's discretion how many leaves they want to designate as EL or CL.

Regarding your employee who is on leave for 15 days, in my opinion, they are on leave without pay.

Amrender

Hi Tushara,

Giving CL and SL is mandatory, and the number of CL/SL allowed differs from company to company. I suggest providing 6 CL and 6 SL (though the number is very less) as it is a newly started company. See some of the leave rules applicable in this particular situation:

Casual Leave: shall not be granted for more than 3 days at a time. Intervening Sundays and holidays falling during the period of Casual Leave will not be counted as Casual Leave. However, including Sundays and holidays, the total absence of an employee should not exceed 4 days at a time. Casual Leave cannot be combined with any other kind of leave.

Sick Leave: can be availed in combination with earned leave, Sundays, and holidays but not with Casual Leave. Sundays and holidays during the period of Sick Leave will be counted as Sick Leave.

Earned Leave: Confirmed employees who have worked for a period of 240 days or more during a year (1st April to 31st March) shall be allowed during the subsequent year earned leave with wages. Sundays and Holidays falling during Earned Leave will be counted as earned leave. Earned leave can be suffixed or prefixed to a Holiday/Sunday. However, both prefixing and suffixing will not be allowed (meaning that the holiday/sunday will be considered as EL). An employee is eligible to get one EL for every 20 days he worked. Usually, the total EL credited will come to 15 or 16 per year (minimum) and will be credited to the employee's account on March 31st.

Please note that the rules applicable to CL and SL can differ from company to company.

Regards, Tushara

Dear Mr. Aakrit,

For the purpose of eligibility for earned leave, 240 days in the preceding year are required. While calculating these 240 days, the number of days of leave availed (paid leave only), maternity leave taken (by women employees), layoff days, leave due to employment injury, and weekly offs and holidays will be considered as days worked. However, for these days, he/she will not earn leave.

For example, if in 2007, one has worked for 220 days, taken 10 days of paid leave, taken 6 days off due to employment injury, and was laid off for 4 days; he will be eligible for leave in 2008, but his leave entitlement will be 220/20 = 11 days. Similarly, if a woman employee has taken maternity leave in the current year, she will also be eligible for leave in the next year, provided she has worked 240 days, including 84 days of maternity leave. However, her leave entitlement will be based on the actual days worked.

The aforementioned criteria are crucial in determining continuous service when assessing eligibility for Gratuity and compensation for retrenchment.

Regards,

Madhu. T.K

Hi Shweta,

First of all, you should formulate HR policies to be implemented in your organization. Abiding by the laws, employees are not entitled to any leave as the firm has not completed its one year. However, this organization can show self-effort to customize its own HR policies (Attendance & Working Hours Policy, Leave Policy, Travel Policy, etc.). This initiative would be led by you, and you can seek outside help from experts in this regard.

My suggestion would be to provide 1 CL & 1 EL per month, which can be carried forward if not utilized. No advance CL during probation; EL is based on the number of months already worked. After probation, advance CL can be taken. Include a clause stating that employees can avail leave based on a minimum of 15 days worked in that month when joining or at the time of leaving.

In the present case, if the employee in question joined the organization before the implementation of this leave policy, they should be granted this leave. This action will also prevent demotivation and ensure clarity for all employees, fostering confidence in the organization.

All the Best! :-P

Dear Sir,

Thank you very much for the clarification. Support and blessings from veterans like you enhance our morale in the field where youngsters like us find it firefighting every day. Thank you, sir.