Curious About Leave Policies in India? Let's Discuss EL, CL, and SL Entitlements

I was wondering if anyone could tell me what the general leave policy in India is. How many days EL, CL, and SL are you entitled to per year?

Also, please let me know what ISO laws state for the leave policy.

I look forward to receiving a reply as soon as possible.

Thank you,
Juliana

Hey Juliana,

Go through this site; I'm sure it will help you: http://www.ppspublishers.com/articles/leavepolicy.htm. I am also attaching what I have set up for my company. This is a startup too, and unfortunately, I did not know about this site. I did research myself.

Hope these things help you.

Hi Juliana,

As for EL i.e. ANNUAL LEAVE WITH WAGES:

- Every worker who has worked for a period of 240 days or more in a factory during a calendar year shall be allowed, during the subsequent calendar year, leave with wages for a number of days calculated at the rate of:
(i) if an adult, one day for every twenty days of work performed by him during the previous calendar year;
(ii) if a child, one day for every fifteen days of work performed by him during the previous calendar year.

Explanation 1: For the purpose of this sub-section:
(a) any days of lay off, by agreement or contract or as permissible under the standing orders;
(b) in the case of a female worker, maternity leave for any number of days not exceeding twelve weeks; and
(c) the leave earned in the year prior to that in which the leave is enjoyed; shall be deemed to be days on which the worker has worked in a factory for the purpose of computation of the period of 240 days or more, but he shall not earn leave for these days.

Explanation 2: The leave admissible under this sub-section shall be exclusive of all holidays whether occurring during or at either end of the period of leave.

A worker whose service commences otherwise than on the first day of January shall be entitled to leave with wages at the rate laid down in clause (i) or, as the case may be, clause (ii) of sub-section (1) if he has worked for two-thirds of the total number of days in the remainder of the calendar year.

If a worker is discharged or dismissed from service or quits his employment or is superannuated or dies while in service, during the course of the calendar year, he or his heir or nominee, as the case may be, shall be entitled to wages in lieu of the quantum of leave to which he was entitled immediately before his discharge, dismissal, quitting of employment, superannuation, or death calculated at the rates specified in sub-section (1), even if he had not worked for the entire period specified in sub-section (1) or sub-section (2) making him eligible to avail of such leave, and such payment shall be made:
(i) where the worker is discharged or dismissed or quits employment, before the expiry of the second working day from the date of such discharge, dismissal, or quitting; and
(ii) where the worker is superannuated or dies while in service, before the expiry of two months from the date of such superannuation or death.

In calculating leave under this section, a fraction of leave of half a day or more shall be treated as one full day's leave, and a fraction of less than half a day shall be omitted.

If a worker does not in any one calendar year take the whole of the leave allowed to him under sub-section (1) or sub-section (2), any leave not taken by him shall be added to the leave to be allowed to him in the succeeding calendar year. The total number of days of leave that may be carried forward to a succeeding year shall not exceed thirty in the case of an adult or forty in the case of a child. A worker who has applied for leave with wages but has not been given such leave in accordance with any scheme laid down in sub-sections (8) and (9) or in contravention of sub-section (10) shall be entitled to carry forward the leave refused without any limit.

A worker may at any time apply in writing to the manager of a factory not less than fifteen days before the date on which he wishes his leave to begin, to take all the leave or any portion thereof allowable to him during the calendar year. The number of times in which leave may be taken during any year shall not exceed three.

If a worker wants to avail himself of the leave with wages due to him to cover a period of illness, he shall be granted such leave even if the application for leave is not made within the time specified in sub-section (6); and in such a case, wages as admissible under section 81 shall be paid not later than fifteen days, or in the case of a public utility service not later than thirty days from the date of the application for leave.

For the purpose of ensuring the continuity of work, the occupier or manager of the factory, in agreement with the Works Committee of the factory constituted under section 3 of the Industrial Disputes Act, 1947 (14 of 1947), or a similar Committee constituted under any other Act or if there is no such Works Committee or a similar Committee in the factory, in agreement with the representatives of the workers therein chosen in the prescribed manner, may lodge with the Chief Inspector a scheme in writing whereby the grant of leave allowable under this section may be regulated.

A scheme lodged under sub-section (8) shall be displayed at some conspicuous and convenient places in the factory and shall be in force for a period of twelve months from the date on which it comes into force, and may thereafter be renewed with or without modification for a further period of twelve months at a time, by the manager in agreement with the Works Committee or a similar Committee, or as the case may be, in agreement with the representatives of the workers as specified in sub-section (8), and a notice of renewal shall be sent to the Chief Inspector before it is renewed.

An application for leave which does not contravene the provisions of sub-section (6) shall not be refused unless refusal is in accordance with the scheme for the time being in operation under sub-sections (8) and (9).

If the employment of a worker who is entitled to leave under sub-section (1) or sub-section (2), as the case may be, is terminated by the occupier before he has taken the entire leave to which he is entitled, or if having applied for and having not been granted such leave, the worker quits his employment before he has taken the leave, the occupier of the factory shall pay him the amount payable under section 80 in respect of the leave not taken, and such payment shall be made where the employment of the worker is terminated by the occupier, before the expiry of the second working day after such termination, and where a worker who quits his employment, on or before the next pay day.

The unavailed leave of a worker shall not be taken into consideration in computing the period of any notice required to be given before discharge or dismissal.

CL and ML together should be at least 12 in a year if you have a 6 days a week working. Further, you need to give at least 10 holidays from the list given out by the Labour officer of your State. (Gazette is published by the State Government every year).

Dear Ajmal,

Your answer is quite comprehensive. One aspect you may consider is that what you have stated is under the Factories Act; however, BPOs are covered under the Shops & Commercial Establishment Act. For the purpose of drawing guidelines, you can use it as the Shops & Estab Act is not as comprehensive, but the number of leaves, etc., has to be in line with the Shops & Estb Act.

Regards,
Arif

Hi,

The leaves are provided under the following acts:

- The Factories Act
- The Shops and Commercial Establishment Act applicable to the state in which the establishment is located
- The Employees' State Insurance Act

The permissible leaves are:

- Earned/Privilege Leave - Factories Act/Shops Act
- Accident cum Sickness provided under the state Shops and Commercial Establishment Act
- Casual leave is not mandatory in all state acts. Some states have this as an alternative to sick leave or a combination.

Presently, with establishments having multi-location units, the policy has to be relevant and in conformity with that state's rules.

I would appreciate if the HR fraternity here presents, after referring to their state law, the statutory leaves permissible in order to make a worksheet for ready reference for all.

hrg-rajaram

I am confused with EL. Is it a combination of CL and SL? Are EL and privilege leaves the same? If you have 5 days working in a week, then ideally how many EL should be given to the employees? Please reply ASAP. Thanks, Vandana

Hi all,

I am in need of an employee handbook. I have been assigned this as a project and require some input.

Regards,
Harish

Hello Juliana,

I hope all your queries related to CL, EL, and SL are answered by the above posts. The remaining issue is the ISO matter. If it adheres to the International Organization for Standardization, then there are no specific rules in any ISO standards for leave-related benefits. It simply states to adhere to the policy standards established by the organization.

Regards,

Hi,

Can anyone clarify the following:

1. Definition of wages for the encashment of leaves; there is confusion regarding Basic + DA or on Gross Salary basis.
2. Laws applicable to IT companies for the purpose of encashment of leaves.
3. Preferably with some examples.

Hi Juliana,

As for EL, i.e. ANNUAL LEAVE WITH WAGES:

Every worker who has worked for a period of 240 days or more in a factory during a calendar year shall be allowed during the subsequent calendar year, leave with wages for a number of days calculated at the rate of:
- If an adult, one day for every twenty days of work performed by him during the previous calendar year.
- If a child, one day for every fifteen days of work formed by him during the previous calendar year.

Explanation 1: For the purpose of this sub-section:
(a) any days of lay off, by agreement or contract or as permissible under the standing orders;
(b) in the case of a female worker, maternity leave for any number of days not exceeding twelve weeks; and
(c) the leave earned in the year prior to that in which the leave is enjoyed; shall be deemed to be days on which the worker has worked in a factory for the purpose of computation of the period of 240 days or more, but he shall not earn leave for these days.

Explanation 2: The leave admissible under this sub-section shall be exclusive of all holidays whether occurring during or at either end of the period of leave.

A worker whose service commences otherwise than on the first day of January shall be entitled to leave with wages at the rate laid down in clause (i) or, as the case may be, clause (ii) of sub-section (1) if he has worked for two-thirds of the total number of days in the remainder of the calendar year.

If a worker is discharged or dismissed from service or quits his employment or is superannuated or dies while in service, during the course of the calendar year, he or his heir or nominee, as the case may be, shall be entitled to wages in lieu of the quantum of leave to which he was entitled immediately before his discharge, dismissal, quitting of employment, superannuation or death calculated at the rates specified in sub-section (1), even if he had not worked for the entire period specified in sub-section (1) or sub-section (2) making him eligible to avail of such leave, and such payment shall be made:
- Where the worker is discharged or dismissed or quits employment, before the expiry of the second working day from the date of such discharge, dismissal or quitting, and
- Where the worker is superannuated or dies while in service, before the expiry of two months from the date of such superannuation or death.

In calculating leave under this section, fraction of leave of half a day or more shall be treated as one full day's leave, and fraction of less than half a day shall be omitted.

If a worker does not in any one calendar year take the whole of the leave allowed to him under sub-section (1) or sub-section (2), as the case may be, any leave not taken by him shall be added to the leave to be allowed to him in the succeeding calendar year. Provided that the total number of days of leave that may be carried forward to a succeeding year shall not exceed thirty in the case of an adult or forty in the case of a child. Provided further that a worker who has applied for leave with wages but has not been given such leave in accordance with any scheme laid down in sub-sections (8) and (9) or in contravention of sub-section (10) shall be entitled to carry forward the leave refused without any limit.

A worker may at any time apply in writing to the manager of a factory not less than fifteen days before the date on which he wishes his leave to begin, to take all the leave or any portion thereof allowable to him during the calendar year. Provided that the application shall be made not less than thirty days before the date on which the worker wishes his leave to begin, if he is employed in a public utility service as defined in clause (n) of section 2 of the Industrial Disputes Act, 1947 (14 of 1947). Provided further that the number of times in which leave may be taken during any year shall not exceed three.

If a worker wants to avail himself of the leave with wages due to him to cover a period of illness, he shall be granted such leave even if the application for leave is not made within the time specified in sub-section (6); and in such a case, wages as admissible under section 81 shall be paid not later than fifteen days, or in the case of a public utility service not later than thirty days from the date of the application for leave.

For the purpose of ensuring the continuity of work, the occupier or manager of the factory, in agreement with the Works Committee of the factory constituted under section 3 of the Industrial Disputes Act, 1947 (14 of 1947), or a similar Committee constituted under any other Act or if there is no such Works Committee or a similar Committee in the factory, in agreement with the representatives of the workers therein chosen in the prescribed manner, may lodge with the Chief Inspector a scheme in writing whereby the grant of leave allowable under this section may be regulated.

A scheme lodged under sub-section (8) shall be displayed at some conspicuous and convenient places in the factory and shall be in force for a period of twelve months from the date on which it comes into force, and may thereafter be renewed with or without modification for a further period of twelve months at a time, by the manager in agreement with the Works Committee or a similar Committee, or as the case may be, in agreement with the representatives of the workers as specified in sub-section (8), and a notice of renewal shall be sent to the Chief Inspector before it is renewed.

An application for leave which does not contravene the provisions of sub-section (6) shall not be refused unless refusal is in accordance with the scheme for the time being in operation under sub-sections (8) and (9).

If the employment of a worker who is entitled to leave under sub-section (1) or sub-section (2), as the case may be, is terminated by the occupier before he has taken the entire leave to which he is entitled, or if having applied for and having not been granted such leave, the worker quits his employment before he has taken the leave, the occupier of the factory shall pay him the amount payable under section 80 in respect of the leave not taken. Such payment shall be made where the employment of the worker is terminated by the occupier, before the expiry of the second working day after such termination, and where a worker who quits his employment, on or before the next pay day.

The unavailed leave of a worker shall not be taken into consideration in computing the period of any notice required to be given before discharge or dismissal.

CL and ML together should be at least 12 in a year if you have got a 6 days a week working. Further, you need to give at least 10 holidays from the list given out by the Labour officer of your State. (Gazette is published by the State Government every year).

Do you have any mandatory provisions of SL and CL to support our side in the talk with the union? Do the needful, sir.

Deva HR Chennai

Commonly, there are three types of leaves in practice: (i) Casual Leave (CL), (ii) Sick Leave (SL), and (iii) Earned Leave (EL).

CL and SL are not mandatory, while EL or Leave with wages is mandatory in the Factories Act and other related acts. It is mandated that every 20 working days make an employee eligible for one day of leave, thus resulting in 16.5 days per year with 310 working days annually.

Regarding the leave policy, we have mutually agreed to fix CL and SL on a yearly basis. EL is commonly used for workers, but it is not mandatory for staff categories. Hence, most companies include the leave policy in the appointment or confirmation letters.

In General:

CL - 12 days CL - 10 days CL - 6 days CL - 8 days
SL - 12 days SL - 6 days SL - 6 days SL - 8 days
EL - 12 days EL - 15 days EL - 12 days EL - 12 days

CL expires at the year-end if not utilized. SL can be carried over for one year, and any balance after the second year-end lapses. EL can be carried over up to 35 days in some companies, with some allowing up to 51 days. If the limit is exceeded, the company may encash the excess leave based on the employee's basic salary. EL leave encashment affects PF deductions.

Some companies have a compulsory policy to deduct three days of EL when claiming LTA.

Devanathan Padmanaban
HR
Chennai
21.02.2009

Hi everybody,

I am falling short of words to thank all those who are contributing to this site for the immense benefit of novices like us. Kudos to all of you.

I request any of you could explain to me the difference between sick leave and medical leave. I am confused as to whether both of them could be clubbed or maintained separately.

Thanks in anticipation.

Hello Ajmal,

I am a production manager for an outsourcing unit in Chennai. My company offers casual leave (CL), sick leave (SL), and earned leave (PL). I have a few questions regarding leave policies:

1. Could you please let me know if there is a standard policy for leaves in BPO/outsourcing units? For example, is there a limit on the number of casual leaves that an employee can club together?

2. Is there any law that states that two types of leaves cannot be combined? For instance, CL and SL should not be taken together.

3. If a person who is not eligible for leave (i.e., during probation) falls ill and is unable to come to work, this is sometimes considered Loss of Pay (LOP). If during the period of absence, any weekly offs/holidays occur, would that be considered as LOP as well?

I would appreciate it if you could share your comments and provide me with the correct laws for these instances so that I can reference them. Also, if there are any websites for this information.

Thanks,
Sean

Excellent answers team, as we're reviewing our Leave Policy in Hyderabad. We are all IT/software developers and provide employees with an entitlement of 30 days per year (2.5 per month). Whilst the policy states they can only carry forward 18 days, this 30-day entitlement seems very high. What is the standard in India? In the USA, we only provide 15!

Hi,

Can somebody tell me if the employer can deduct the leaves accumulated over the last four years all at once? Is it legal?

Vinodknautiyal

Could anybody please give me details of the leave policy for staff other than factory workers in a factory? I am referring to management staff. Will we fall under the Shop and Establishments Act?

I have one query.

We have a Form 1 Pvt. Ltd. company, and there is no leave policy. Is there any leave policy as per government regulations?

Hi All,

What is the EL/PL calculation formula as per the Delhi Shop & Establishment Act? Please do help me with it.

Mohd. Anish

Hello,

Please find the attached document.

Can someone provide information about the leave policy for BPOs? Are there any laws regarding that, or is it that each company has its own leave policy?

To cite HR, I was wondering if anyone could tell me what the general leave policy in India is. How many days EL, CL, and SL are you entitled to per year. Also, please let me know what ISO laws state for the leave policy.

Looking forward to receiving a reply as soon as possible.

Thank you,
RICHA SHRI

Hi, I just want to know that if I have a number of C-Offs and if I have to adjust it in between holiday gaps, how is it calculated? For example, if 26th January is a holiday and the 28th is also a holiday, and I have 2 C-offs, and I was absent from work on the 25th, 26th, 27th, 28th, and 29th, how is it calculated?

Dear all,

I have the following queries, please advise. If an employee goes on leave from Monday to Saturday and returns to work on the following Monday, do we need to deduct his Sunday?

Thanks,
Suresh

Hello all,

I am new to this site. Can you please let me know if I am taking Friday off (EL/CL or any leave) and the 2nd Saturday and Sunday, which are already off in my company, how many leaves will be deducted from my salary - one or three - if I am joining back on Monday?

Thanks,
Bharti Sharma

Leave Policy Preparation

Please prepare a leave policy keeping in view the applicable State Shops & Commercial Establishment Act. If you are employing a female employee and the Maternity Benefit Act is applicable, then also review this Act for maternity leaves.

Regards,
R.N.Khola

I work in a pharmaceutical company. I want to know under which act I should have my leave policy, i.e., under the Sales and Promotion Act, the Shop and Establishment Act, or the Factory Act? Also, may I have the same leave policy for the office staff, factory workers, and field staff? Should the leaves be given in the same year or the consecutive year based on the financial year already worked by a staff?

Thanks,
Neha

Hello Seniors,

I recently joined a pharmaceutical organization as an HR executive and am heading the department alone. I am facing problems with the Leave Policy and related calculations. Can anyone please help me?

Regards,
Smita

Hi Smita,

I am just sharing the thumb rule.

1. Earned/Privilege Leave - 1 per 20 working days.
2. Casual Leave - 7 per year.
3. Sick Leave - 7 per year.

Except EL, every kind of leave will lapse after the year-end.

As per the Factories Act, you are required to list 10 holidays in a year.

Thanks and regards,

Shamsheer Pal Singh Dhillon
Head Legal

Dear Juliana,

As per the general HR policy, we can provide CL=12, SL=12 per year to individuals who have a gross salary of more than 21000 Rs. Only those personnel meeting this criterion are eligible for SLs.

In terms of PL, personnel must complete one year of service with the company to be eligible for PLs. PL=15 per year.