Navigating Leave Policies: Can We Simplify Leave Types Without Breaking the Law?

Hi All,

We are an ITES company and are registered under the Punjab Shops & Establishment Act. As the Act specifies the total leaves/holidays that one has to provide in a year:

- Six Holidays - three days on 15th Aug, 26th Jan, and 2nd Oct, and three others
- One day of Earned Leave for every 20 days worked, totaling 18.25 leaves
- Seven days of Casual Leaves and seven days of Sick Leaves

In our organization, we provide 11 Holidays, 14 Earned leaves, 7 Casual Leaves, and 7 Sick Leaves.

We want to address the following queries:

1. Whether we can offer just one type of leave instead of PL, SL, and CL? Would this be a contravention of any law? We intend to maintain our Holidays.
2. What should be the policy for leave sanction/availment in such a scenario? Is there any specific capping for the maximum number of leaves to be taken at one time? How should unplanned/non-sanctioned leaves taken due to emergency situations be handled? What documentation can we require for granting/sanctioning long leaves either before or after the employee's leave period?
3. What about the balance leaves that are not availed by employees at the end of the year? Is carry-forward or encashment an option? If so, how much?
4. Can we have a few employees working on days like 15th August, 26th Jan due to business requirements? We will definitely pay the OT. Is any pre-authorization required in such cases?

I would appreciate and welcome feedback, guidance, and suggestions regarding this.

Best Regards,

Hi Saurabh,

Answer for question 1: You can't club all the leave because PL is encashable and accumulated, and other lapses by the end of the year.

For question 2: You have to establish rules based on what is common in similar industries or refer to the bar act for guidance.

Answer is provided in number 1.

Regarding question 4: Yes, pre-authorization is required in that case.

Thank you, Mr. Bakshi. Your guidance is of immense help.

Regarding query no. 2 - The act states that the leaves must be applied for in advance (scheduled), then sanctioned. If not sanctioned, a written explanation must be given to the employee. If such leave is applied for again, it must be allowed. Sick leaves are never planned... so we just want to know how people grant sick leaves to prevent their misuse. We all know that obtaining relevant documents like a doctor's certificate is quite difficult to get. Moreover, in a competitive environment where Turnaround Time (TAT) is crucial, too many people taking sick leaves on a single day affects the work! Any suggestions from those who have faced similar problems would be greatly appreciated.

We would also like to know where we can obtain pre-authorization (query no. 4) for working on a public holiday. What is the procedure, and what are the implications if a few employees work on those days due to business requirements (though they are paid overtime)?

Best Regards,

Saurabh