Understanding Earned Leave: Should Holidays Count as Leave Days or Not?

Dear All,

Kindly let me know, "what is meant by Earned Leave?" My previous employer considered working days as earned leave, but my current employer does not calculate it that way. When leave is taken along with holidays, my current employer considers those days as leave, which I believe should not be done. Is there any legal document to support the concept of earned leave being based on working days only? If holidays are also considered as leave, what about the compensation for lapsed holidays? Kindly provide more information on this. According to Good Industry Practice, what is the correct approach?

Regards,
Aparna

For every 20 working days, an employee is eligible for 1 Earned Leave (EL). Under which company act are you registered?

Dear Margerate,

Our company is a Consulting Engineers firm which is Pvt. Ltd., but I don't know under which act it is registered. Actually, our company includes holidays in leave. Let me explain this with an example.

Current Company: I am taking the second week of May to the third week of May off. In this case, we have holidays on the 14th (second Saturday), 15th (Sunday), 17th (Buddha Purnima), and 21st (Sunday). So if I apply for leave from the 16th to the 21st, as per my knowledge, they should consider it as a 5-day leave (against the number of working days I am not present in the office). But they will include the 4 days which are holidays as leave days, and the total number of leave days will be 7. Is this right? If not, can we have any legal document that we can refer to support our leave calculation method (i.e., exclusion of holidays from the number of leaves)?

Please reply, as I do not have an HR background and urgently need your help.

Thanks in advance.

Regards,
Aparna

Public holidays are not part of annual leave and should not be included in the leave calculation. This is an international HR practice.

Thanks

I guess they are considered as intervening holidays, i.e., if you take leave in between public holidays or weekends. For example, if you take leave on Friday, Saturday, Sunday, and Monday, they consider these four days as intervening holidays. It's a normal HR practice. Another example is if you take leave on Thursday, Friday, Saturday, and Sunday, then they consider only two days as weekend leave; they won't calculate them. At the same time, if you take leave in between public holidays or along with weekends, this will happen.

Correct me if I am wrong.

As per my knowledge, if you processed the leave for some days and holidays fell in between, it will still be calculated as leave. When you take leave for more than 3 days, it will be considered as earned leave, and you can't include weekends and public holidays. For example, if your weekly off is on Sunday and there is a public holiday on Sunday, you cannot take an additional day off.

Please correct me if I am wrong.

Hi Aparna,

EARN LEAVE/PAID LEAVE - Under Section 79 of the Factory Act, if an adult employee has worked for 240 days in the calendar year, he/she will be eligible for 1 PL/EL for every actual 20 days worked. For a child, it is one day for every fifteen days.

For the computation of 240 days, the days of lay-off, for a female worker - maternity leave not exceeding 12 weeks, the leave earned in the previous year and availed in the current year will not make the employee eligible for any leave on those days. This is solely for the computation of the 240 days.

When an employee joins other than on the first day of January, if they have worked for two-thirds of the total number of days remaining in the calendar year, they will be eligible for leave.

"An employee earns leave by meeting certain criteria; hence, it is known as Earned Leave."

M.G. Rabbani

Hi Everyone,

This is a well-defined rule under the Model Standing Order (Industrial Employment Standing Order) - to avail the benefits of the holidays, an employee shall physically be present before or after the scheduled holidays. If an employee is not physically present before or after the scheduled holidays, they will not be entitled to the benefits of the holidays.

M.G. Rabbani

Dear All,

I am taking the second week of May to the third week of May. In this case, we have holidays on the 14th (second Saturday), 15th (Sunday), 17th (Buddha Purnima), and 21st (Sunday). So, if I apply for leave from the 16th to the 21st, based on my understanding, they should consider it as 7 days of leave (as holidays are merged into leave). However, the employee must be present on the 13th of May in the office; otherwise, that day would also be inclusive in the leave. Is this correct?

Thanks & Regards,
Sweta Kumari

Dear Aparna Ji,

Holidays and weekly offs falling in between a leave period would be treated as leave. In other words, one cannot enjoy the benefits of holidays and weekly offs that intervene in the leave period. However, holidays and weekly offs preceding or succeeding the leave period are allowed as holidays and weekly offs prefixing or suffixing the leave. This applies only to earned leave (privilege leave), sick leave, maternity leave/paternity leave, and leave without pay. When casual leave is applied for, intervening holidays and weekly offs are allowed.

Example 1 (condition: you observe a five-day week from Monday to Friday).

If one applies for 5 days of earned leave/privilege leave from 08-08-2011 to 12-08-2011, they will be sanctioned only 5 days of EL/PL, and their leave account will be debited for only 5 days of EL/PL. However, they will actually be availing themselves of Saturdays, Sundays, and public holidays that are prefixed and suffixed to their leave. To be precise, 06-08-2011 and 07-08-2011 would be prefixed to the leave, and 13-08-2011, 14-08-2011 & 15-08-2011 would be suffixed to the leave.

Example 2 for casual leave (condition: you observe a five-day week from Monday to Friday).

If one applies for and is sanctioned two days of casual leave on 12-08-2011 and 16-08-2011 respectively, they will get the benefit of intervening weekly offs and holidays. Only two CL will be debited from their account, but in effect, they will get the continuous benefit of 5 days off (13-08-2011 being Saturday, 14-08-2011 being Sunday, and 15-08-2011 being a national holiday).

Example 3

If someone has no casual leave to their credit and needs only a two-day leave on 12-08-2011 and 16-08-2011, in this case, they will have to apply for 5 days of PL/EL from 12-08-2011 to 16-08-2011. The employee would not get the benefit of intervening weekly offs and national holidays. These will be counted as a leave period because leave begins and ends as leave. No weekly offs/holidays can be allowed in between leave.

Please sit with a calendar and try to understand these examples. In case you find any difficulty in understanding these, please do not hesitate to revert back.

How to work out leave due is a different question. I am not touching it now.

Thanks & regards

Dear All,

I had a very good idea from this discussion. Please let me know if an employee takes leave from 10.08.2011 to 17.08.2011. Between these periods, 15.08.2011 is a national holiday, and 12.08.2011 is the company's declared holiday. So, please guide me if the above both days (15th Aug & 12th Aug) are considered under the employee's leave or not.

Thanks,

Dear Jagdish Ji,

If the leave applied for is earned leave (PL), sick leave, leave without pay, or maternity leave, then the entire period from 10.08.2011 to 17.08.2011 would be treated as leave, and no intervening holidays falling on 12.08.2011 and 15.08.2011 can be counted as holidays.

Thanks & regards