Understanding Mandatory Leave and Bank Holidays for Startups: What Are the Legal Requirements?

Hi everyone, can anybody please confirm how many C.L. & Sick Leaves are mandatory as per the law? I'm aware that the earned leaves/privilege leaves as per the Factories Act are 1 for every 20 days of working. However, I would like to know the rest as well since I'm in the process of creating work policies for a new startup. Also, could someone provide a list of the Bank Holidays that are mandatory from the Government?

Thanks,

Pranita

I am also in the process of formalizing leave policy for an upcoming growing company. I need to know the number of CLs + Sick Leaves as per the Factories Act. Can somebody help?

Also, what should be the ideal Paid Leave Break Up between Privilege Leaves and Casual Leaves?

Regards,
Nandini

Hello Pranita,

As per the labor act, we have to calculate CL - 12 days, SL - 12 days, and EL - 12 days.

Regards,
D. Sudhakar

An employee has the right to leave benefits, which should adequately cover their personal needs, sickness, and emergencies. However, it is a privilege extended by the management at its sole discretion.

Leave Policy Variations

The leave policy will vary depending on the employee's status of appointment, such as trainees, contract workers, and confirmed employees.

During the training period, an employee is eligible for 12 casual leaves.

Upon confirmation, they can avail 12 CL, 6 SL, and 12 PL earned during the previous year.

Thanks,
Sreedevi

Dear Pranita,

As per the law, 6 sick leaves and 6 casual leaves are mandatory.

Regards,
Nishant

Dear Pranita, Below is the quote of the Shop and Establishment Act 1954.

22. Leave

(1) Every person employed in an establishment shall be entitled—

- (a) after every twelve months' continuous employment, to privilege leave for a total period of not less than fifteen days;

(b) in every year, to sickness or casual leave for a total period of not less than twelve days: Provided that:

(i) an employee who has completed a period of four months in continuous employment shall be entitled to not less than five days' privilege leave for every such completed period; and

(ii) an employee who has completed a period of one month in continuous employment shall be entitled to not less than one day's casual leave for every month:

Provided further that a watchman or caretaker who has completed a period of twelve months in continuous employment and to whom the provisions of sections 8, 10, 11, 13, and 17 do not apply by virtue of an exemption granted under section 4, shall be entitled to not less than thirty days' privilege leave.

Understanding Leave and Holiday Regulations

You need to first check what kind of organization you are working in (Factory/Shop & Establishment, etc.). That will determine which rules shall apply to you. There is no central law on this, and it is governed by state legislations. Therefore, you need to refer to your local (state) legislation to decide the quantum of leave and public holidays.

Public Holidays are governed by state-level acts. For example, in Karnataka, it is governed by THE KARNATAKA INDUSTRIAL ESTABLISHMENTS (NATIONAL AND FESTIVAL HOLIDAYS) ACT, 1963. Similarly, each state has its own act that defines public holidays. Bank Holidays may or may not be identical as banks have more non-banking days than industrial establishments.

We normally get confused with holidays declared under the Negotiable Instrument Act. Holidays declared under that act are only for financial purposes and their treatment.

So, please go through the local legislations/state rules to gain insight into what is prescribed under the law. Then compare it with market practices to ensure that your policies are market competitive and reflect your company's philosophy and values. Just replicating provisions of the law into policies is naive and a sheer waste of time. Even if you want to provide benefits no more than required by law, you need to see how the process and communication of benefits reflect your company's values and philosophy.

Hope this clarifies.

Regards,
Sushil Tayal

Dear Nandini, This is to inform you that The Factories Act, 1948 does not have any provisions relating to the grant of Casual and Sick leaves. The Factories Act deals only with annual leave with wages. Please go through Chapter VIII on annual leave with wages. If your company is covered under The Factories Act, then you should refer to your applicable State Industrial Employment (National and Festival Holidays and Casual and Sick Leaves) Act to understand the provisions for granting statutory CL and SL to the employees covered under this Act.

Members who are highlighting the number of CL and SL as per the law should also specify under which law they are providing this information. It is not necessary that the numbers they mention will be applicable to the member making the inquiry. As we all know, Sick Leave and Casual Leave are granted under the relevant State Labour Laws.

With Regards,
R.N.Khola

Thanks a lot, this is very useful, getting the act name as well  Dear Pranita, below is the quote of the Shop and Establishment Act 1954.

22. Leave.

(1) Every person employed in an establishment shall be entitled:

- (a) After every twelve months' continuous employment, to privilege leave for a total period of not less than fifteen days;

- (b) In every year, to sickness or casual leave for a total period of not less than twelve days: Provided that:

(i) An employee who has completed a period of four months in continuous employment shall be entitled to not less than five days' privilege leave for every such completed period; and

(ii) An employee who has completed a period of one month in continuous employment shall be entitled to not less than one day's casual leave for every month:

Provided further that a watchman or caretaker who has completed a period of twelve months in continuous employment and to whom the provisions of sections 8, 10, 11, 13, and 17 do not apply by virtue of an exemption granted under section 4, shall be entitled to not less than thirty days' privilege leave.

Hi Sushil,

We are a sales & marketing firm located in Delhi/NCR (Noida). Can you please suggest which act I should refer to for more information on this?

Thanks,
Pranita

Leave Policies as per the Law (Min)

I am also in the process of formalizing the leave policy for an upcoming growing company. I need to know the number of CLs and Sick Leaves as per the Factories Act. Can somebody help?

Also, what should be the ideal paid leave breakup between Privilege Leaves and Casual Leaves?

Regards,
Gajendra Kardak

As per the Factory Act:
- CL: 7 days
- SL: 7 days
- EL/PL: 1 leave granted for every 20 working days
- Holidays: 8 days

Yatin

Thank you to all for your valuable postings regarding the grant of leaves to employees under various acts. Could anybody please tell me if there are any rules or standards for the usage of these leaves?

Usage of Earned Leaves

For example, if an employee has earned 12 EL, can they use all the days at once? And can they mix CL and SL? Please clarify this for me.

Hi Pranita,

Mr. Khola is absolutely correct. EL entitlement is as per the Factories Act, and there is no provision for SL or CL in the Factories Act. One day of EL for every 20 days of work is the provision given in the FA 1948. CL/SL are governed by the state Shops and Establishment Act or Industrial Establishments Act. You may please mention the nature of the industry and the state you are referring to.

Regards,
Manoj

As per the law, you have to give eight paid holidays, i.e. 26th Jan, 15th Aug, etc., in a year to confirmed, permanent, and contract employees.

Also, you have to give 6 SL, 6 CL, and 18 (Min) Earned/Privilege leave as per the Factories Act only to confirmed employees.

Hi Leena,

Can anybody please tell me if there is any option to help a job seeker from outside India through cite hr? I'm not from India; I'm from Bangladesh. In Bangladesh, there are lots of multinational and international organizations working. So, is it possible for anybody to help me in getting an opportunity?

Leena
Bangladesh

Hi,

It differs from company to company. In our organization, CL - 12, SL - 12, and PL - 12. CL and SL automatically lapse every year, and PL is given encasement.

This is for your information.

Bhoopathi. J

Hi Manoj, we are a sales and marketing firm and a new startup. We are involved in the production, sales, and marketing of Solar Energy products. Could you please advise which Act I should refer to in terms of leaves, specifically CL and SL?

Thanks and Regards,
Pranita

Hi Pranita,

Mr. Khola is absolutely correct. EL entitlement is as per the Factories Act, and there is no provision for SL or CL in the Factories Act. One day of EL for every 20 days of work is the provision given in the FA 1948. CL/SL are governed by the state Shops and Establishment Act or Industrial Establishments Act. Please mention the nature of the industry and the state you are referring to.

Regards,
Manoj

I am from Pakistan, and according to the Factory Act of 1934, there are different types of leaves granted to employees. This includes 10 Casual Leaves per year, 8 Sick Leaves per year, and 15 Earn/Annual Leaves.

These leaves are provided to ensure that employees have the necessary time off for various reasons such as personal matters or health issues. It is essential for both employers and employees to understand and adhere to these leave policies as outlined in the Factory Act of 1934 to maintain a healthy work-life balance.

Dear Pranit,

Basically, the context of Leaves Law is based on territory. If you are living in metros, it's different, and if you are living in non-metros, it will be different. To give you a concrete answer, please tell me your type of city.

Regards,

Mr. R.N. Khola,

I am working in Gurgaon (Haryana) and I want to know the rules relating to SL & CL. How many SL & CL are necessary to give to the employees in a factory?

Thanks,

Regards,

Arun Gahelot

HR Executive

Student of M. Adampur

Dear Arun, In Haryana, we are to follow the Punjab Industrial Employment (National & Festival Holidays and Casual & Sick Leaves) Act, 1965, as applicable to the State of Haryana for the grant of CL & SL to the workers working in factories. According to Section 4 of this Act, every worker shall, in each calendar year, be allowed by the employer casual leave for seven days & sick leave for 14 days in such manner & on such conditions as may be prescribed.

With Regards,
R.N. Khola

Clarification on Leave Provisions Under the Factories Act, 1948

The Factories Act, 1948 only has provisions relating to the grant of earned leaves. Details regarding the grant of EL are provided under Chapter VIII on annual leave with wages. In my view, we do not have any State Act that grants us 15 National holidays. If such a provision exists, please provide us with the name of the Act that includes this provision.

With Regards,
R.N.Khola

Re: Leave Policies as per the Law (Min)

Hi, an employee has the right to leave benefits, which should adequately cover their personal needs, sickness, and emergencies. However, it is a privilege extended by the management under its sole discretion. The leave policy will differ based on the employee's status of appointment, including trainees, contract workers, and confirmed employees.

During the training period, an employee is eligible to receive 12 casual leaves. Upon confirmation, the employee can avail of 12 CL, 6 SL, and 12 PL earned during the previous year.

For more information, please visit https://www.citehr.com/247927-leave-...#ixzz0likBT9Fo

As such, there is no labor law that prescribes fixed CL or SL. More precisely, statutes have not covered the leave aspects except the PL under the Factories Act. Leaves other than PL are generally fixed based on the prevailing customs and practices of the particular industrial zone. In no way is it bound by law.

Dear Mehra, as per the law, the minimum leaves are as follows:

1) Casual Leave - 7 days annually
2) Sick Leave is not mandatory for organizations covered by the ESI Act. Only ESI will compensate for the day of leave. If not covered by ESI, the minimum is 7 days per annum.
3) Earned Leave/Annual Leave as per the Factory Act, 1948 is a leave every 20 working days, which totals around 15 days.
4) During the training period, one should be eligible for leave except for Apprentices.

Thank you.

Mr. R.N. Khola,

What are the leaves legally eligible for the textile industry in Tamil Nadu? Apart from Earned Leaves.

Regards,
Sathasivam
HR Manager

Workers/employees working in the textile industry are also eligible to have CL & SL under The Tamil Nadu Industrial Establishment (National & Festival Holidays and Casual & Sick Leaves) Act if this Act is applicable in your state. Women employees who are not covered under the ESI Act, 1948 are also entitled to maternity benefits in the form of maternity leaves.

Opinion submitted as requested.

With Regards,
R.N.Khola