Confused About Leave Policies in Construction: How Do You Handle Changes and Balances?

Subject: Doubts about Leave Policy

Can you tell me the appropriate leave policy for a construction company? I am an HR executive working in a construction company. Actually, I designed a leave policy in Jan '11 common for employees on probation and confirmed as 15 privilege leaves, 5 casual, and 5 sick leaves. But now my manager has changed it and told me to make it 24 leaves common yearly (Jan to Dec), i.e., no sick, no casual, etc. He said every employee can avail of 2 leaves a month, i.e., as per policy 12 leaves in 6 months. And if an employee has availed more than 12 leaves during the half-yearly, then deduct the extra leaves taken by them. Actually, this has created confusion for me because then what about those employees having balance leaves, what about encashment, carry forward leaves... I have too many doubts. Please help.

Regards

It's not possible, and it's also lawful. What the employees are eligible for is against their entitlement of 240 days from last year. If there are more than 15 days of paid leave balance, the organization can adopt the policy they desire. Regarding this new policy, it requires modifications in the standing orders. I don't think it's approved by the labor office.

Hi Poorvashan, a two-leave-per-month policy is commonly adopted in many organizations. If you are wondering how to implement this, you can initiate the process at a later date, such as starting from January 1st, '12, and communicate this change to employees well in advance.

Revisions in HR policies are routine and should not pose a problem, except for the exclusion of leave encashment in the new policy. Employees may not have significant leave balances aside from their Earned Leaves/Privilege Leaves. You can discuss with your manager how to handle the settlement of these leaves, whether he prefers to pay them off or allow employees to utilize their remaining leave balances.

Thank you,
Rashee

Thanks, but one more thing I want to ask is, now until June '11, those who have availed more than 12 leaves, should I deduct the extras in July's salary?

I don't think that you should deduct anyone's salary because you are revising the leave policies. Until you communicate the revised policy to the employees, there is no point in making deductions. Instead, you can adjust them from the earned leave balance. The final decision regarding Earned Leaves is yours. Accordingly, you can adjust on a pro-rata basis, but no deductions should be made.

Thanks,

Rashee

Standardizing Leave Policies Across Companies

All such policies vary from company to company. One approach could be to set a standard of 24 leave days per annum for all employees. Then, track the leave taken by each employee throughout the year. At the end of the year, provide encashment for the employees who have unused leave days remaining, and deduct the salary of those who have taken more leave than allocated. Keeping the process simple is key.

Understanding Leave Policies

Leave cannot be claimed as a matter of right by employees. Leave policies differ from company to company. Employers have the right to change policies subject to acceptance by employee representatives, amendments in standing orders, and approval from the labor welfare department.

If you are covered under ESI and employees are registered under ESI, then they can avail of sick leave from ESIC. You cannot deny maternity leave. Don't get confused; create transparency in your policies and establish a win-win situation.

Regards

Hi Abedeen, please correct me if I am wrong. When the leaves have already been availed by the employees adhering to the existing policies and their entitlement, can the employer deduct the salary in case of a shortage of leaves due to a revision in the policy? It is assumed that the employee would not have taken excess leaves if the change in policy had taken place earlier.

Thanks

Leave availed by employees and existing policies will be applicable at the time of availing leave. Revision will be effective from the date, and from that date, new policies will be applicable. Deductions will be made based on the new policy.

Regards

Hi friends, I am adding some information that might be useful to you. I got it from this site only. Mostly what organizations follow is as mentioned below:

1. Privilege Leave/Earned Leave (PL/EL) - 18/year @ 1.5/month
2. Casual Leave (CL) - 6/year @ 0.5/month
3. Sick Leave (SL) - 6/year @ 0.5/month
4. Leave Without Pay (LWP) - has no upper or lower limit defined. It is granted only in case of emergency when PL, CL, and SL account balance stands at zero.
5. Maternity Leave - as per the law
6. Paternity Leave - 7 days; allowed for two children
7. Compensatory Off - again, upper or lower limit is not set, rather is issued at actuals.

I hope this information is helpful to you. Let me know if you need more details.