New Employees Without ESI: How to Navigate Leave Eligibility in My Company?

Dear Seniors,

Hi, this is Smita here. I am working in a steel manufacturing company. I have a doubt regarding the leave circular in the company. As per the circular, there are 15 EL and 7 SL. EL is available after the completion of 1 year, and SL is not applicable for ESI-covered employees. So, people who have recently joined are not eligible for any leave (at least for 1 year) as they have not received their ESI card and, therefore, are not benefiting under ESI.

Please help me figure out how to handle this problem.

Warm Regards,
Smita

Hi Smitha,

I had worked with a manufacturing company's corporate office, and to my knowledge, if I am not wrong, any manufacturing company should have the minimum of the following leaves:

1. 8 Sick leaves
2. 8 casual leaves
3. 15 earned leaves.

If I am wrong, please do correct.

Dear,

In a manufacturing concern, the Factories Act is being followed. As per the Factories Act, EL (Earned Leave) is calculated as one day leave for every twenty days worked. Regarding CL (Casual Leave) and SL (Sick Leave), these provisions are given in the standing orders. Please check your standing orders to see what provisions are given for SL/CL. Generally, a company provides 7 CL and 7 SL.

Thanks,
J. S. Malik

Thank you, Mr. Malik,

I want to know about SL and the applicability of SL of ESI covered employees. And if anybody has not received an ESI card, then what about the leave?

Smita Rath

There are two kinds of employees engaged in any industrial establishment.

First, there are workmen who are involved in operation and maintenance in manufacturing, and some manual or clerical employees.

Second, supervisory and managerial employees are outside the purview of the relevant Factories Act limit, depending on their salary and wages as per the limit fixed in the corresponding Payment of Wages Act. They draw some wage limit, etc. Further, there is a separate provision, if I recollect correctly, for exempted employees engaged in supervisory and above positions, which is not regulated by the Factories Act. Therefore, sick leave can be applied.

Employees in supervisory and managerial positions are eligible for Privilege Leave or Earned Leave and Sick Leave, etc., which are also mentioned in standing orders. When referring to standing orders for extra leaves other than those mentioned in the Factories Act for workmen, other than Earned Leave, if mentioned in Standing Orders, then that is negotiated before certification because Standing Orders are certified with the consent and agreement of Trade Unions.

For workers, if there is no mention of sick leaves or casual leaves, etc., in Certified Standing Orders, then these leaves must have been negotiated as part of agreements as workmen come under the bargainable category, and such leaves are implemented as part of an agreement or settlement. Although earned leave is regulated as per the Factories Act for workmen engaged in factories.

You must separate both classes of employees while considering the leave.

As far as ESIC is concerned, an ESIC card takes a maximum of 7 days to issue from the date of submission of Form 3. OK

Badlu

Hello Seniors,

My question is, should each and every company follow the leave policy? Are there any rules that a company should have regarding the leave policy?

Cheers,
Ganesh Pai

Hi Ganesh,

If you stick to the labor laws, then it's minimum prescribed standards as per International Labour Organization conventions and Member Governments' acceptance to follow those norms in consultations with the Federations of Trade Unions. Generally, they are reinforced through either incorporating or amending labor laws.

Labor laws are benchmarked with most global practices and ILO conventions, which are the minimum mandated by law to be enforced to regulate the conditions of employment in the ILO member countries.

If an employer, as a matter of good HR practices based on some scientific studies, implements more than the prescribed standard norms for leaves, rest, shifts, intervals, etc., then it's called progressive and forward-looking practices.

Generally, these practices are promoted by companies from Western countries. For example, in India, labor laws prescribe a weekly 48-hour working week, which is the ILO norm for the minimum standard, but Western countries follow a 40-hour week because that suits their work culture.

Similarly, other kinds of leaves have their prescribed labor standards. If your company desires to adopt such global practices, no law will be violated. Companies adopt leave policies based on facts:
1st are leaves recommended by laws as applicable - Shops & Est Act, Factories Act, etc.
2nd driven by market practices to attract, reward, and retain employees; companies adopt industry standards.

For example, Shops and Establishment Acts have mentioned many kinds of leave provisions, but the same definitions may not be found in the Factories Act because mandated by law is the minimum requirement.

Further, I would like to add here that in Public Sector Companies or Government Employments, service conditions and leave provisions are regulated by various notifications by Ministry and Department of Personnel as well as Department of Public Enterprise, etc., from time to time.

Badlu

Hi,

Basically, there are three types of leave in a manufacturing unit. The first is PL, which means Privileged Leave or Earned Leave. The second is SL, which means Sick Leave. The third is CL, Casual Leave.

For PL: Suppose a person joins your company, PL is applicable after completion of one year if he works 240 days in that accounting period. If a person worked 240 days in an accounting period, then every twenty days, the employee will earn one day leave as per the Factory Act 1948, under section 79 - Annual Leave with Wages.

Second and third leaves totally depend on company policy. Generally, it is 7 days in a year for both types of leave.

Hi,

SL has nothing to do with ESI coverage. Please go through the standing orders of your company. If they are not available, consider the provisions of the model standing order in congruence with the Factories Act.

It is your responsibility to convince the management regarding all of this. However, review the past and present philosophy of your management and only then take any step.

Regards,
Vinod