How Can We Fairly Compensate Employees for Working on Holidays in a 24x7 Service Industry?

Dear All,

We are a company operating on a 24x7 basis in the service industry. Therefore, employees may not be able to take leaves or holidays. However, we follow a rotation shift schedule 24x7 to ensure that each employee receives one whole day off as a weekly break.

Regarding leave and holiday compensation:

1. Employees are entitled to 15 PLs/ELs credited to their accounts annually. These leaves can be encashed at the rate of per day wages multiplied by the number of PLs to be encashed.

2. There are 5 National Holidays and 5 Festival Holidays, totaling 10. As we require employees to work on these days due to our industry's nature, we seek guidance on how to compensate for this.

We kindly request clarification on how to adequately compensate for these holidays and leaves in accordance with HR Statutory Compliance.

Thank you,
Vadiraj Kulkarni

Being in the service industry, your establishment should be covered by the respective state's Shops and Commercial Establishments Act. The above Act provides for weekly offs, leaves, and holidays. In some states, a separate Act (like in Kerala, there is the Kerala Industrial Employment National and Festival Holidays Act) may be in place, which demands the granting of national and festival holidays. Under the Act, it is mandatory to designate such holidays and inform the appropriate officer (Labour Officer) about the holidays.

The employer can require any employee to work on a holiday by issuing a notice to that effect. For work on a holiday, an employee is entitled to receive double the rate of wages and a compensatory holiday in lieu of the holiday lost. This is in accordance with the Kerala Act. Please verify if there have been any changes in the enactment of your state.

An employer can designate any day as the weekly off. In service industries that operate seven days a week, the employer can specify the weekly offs for different employees. It should be ensured that the days off are displayed on the notice board and that no employee works for more than 6 consecutive days without a weekly off.

Typically, under the Shops and Establishment Act, one day in a week should be observed as a closed holiday unless otherwise permitted by government notification. Please check if your industry has received any such exemptions. For instance, a hotel may be exempted from the requirement of weekly closing through a notification.

Regards,
Madhu.T.K