How Should We Handle Uncommunicated Leave Policy Changes Affecting Staff?

Dear Seniors, I need to solve a situation that was supposed to be resolved 4 years ago by a senior person in the company. It was communicated to the senior that there would be no leaves carried forward or encashment, but this information was not shared with the staff. Now that this person has left, it has come as news to everyone (staff and directors). What would be the best way to resolve this issue as there are staff members with approximately 102 leaves accumulated?

Hello AnuGD, What does the paperwork say in this matter? There must definitely be some record of the decision and, more importantly, the reasons considered at that point in time. If you are clear on such aspects, it would be easier to handle this issue now.

Also, you mentioned "solved 4 years ago." What do you mean by this statement?

Also, 'who' informed the senior? Have both the senior and the person who told him/her about this left the company?

Regards,
TS

There was no paperwork done. The directors had a meeting with the HR head and were told that the staff should take their accumulated leaves to which they are entitled, as it was made very clear that there would be no encashment or carry forward. However, whatever leaves an employee had were supposed to be exhausted during that year. The HR head was supposed to give a circular to inform the staff, but instead, the only thing told to the staff in a meeting was that there would be no encashment on accumulated leaves.

The directors have just come to know that the instructions they had given were not followed. Now, I have to put forward what are the possible ways that the staff can be compensated. Cash against leaves is being considered, but are there any other ways?

Regards,

Cash Against Leaves: A Viable Option

"Cash against leaves" is a viable option if there's no cash-flow problem in your company.

If you want to avoid any cash outflow or just don't want to go for the "Cash against leaves" option for whatever reason, another option could be to reintroduce the "carry forward" option, with limitations (a maximum limit of leaves that can be carried forward).

However, you haven't answered my query regarding the "reasons" for the decision made by the Directors 4 years ago—they must still be around. It's quite possible that a temporary cash-flow problem at that point in time could be the reason, which can now be normalized.

One more option to avoid any backlash from the employees, for no fault of theirs, could be to have a one-time "Cash against leaves" option considered and then make the future policy clear to them now.

Management Considerations

Another important point for the Management—usually, all high-level meetings end with minutes of the meeting being made and circulated. Obviously, this seems to have not been done, or there's no such practice in your company (had it been there, someone who attended the meeting would have definitely noticed it then). Just check and correct the situation before another similar situation arises for any other issue.

Regards,
TS

Dear TS, thank you for your opinion. The directors are still there. The reason for such a decision was that they wanted the employees to be motivated, take time off, spend quality time with family, and enjoy work as well.

I do agree that minutes of the meeting should have been taken. However, I also don't understand why it was not done. I feel that perhaps some compensation can be provided, and some leave can be carried forward to the next year for the employee to utilize.

Thank you for your assistance.

Regards,
Anu

We are working in the private sector. We have received a notice that there is no encashment of leave. Only seven days of leave will be carried forward; the rest will lapse if not taken. I would like to know if there is any rule or law regarding this.

Thanks,
MKS

Companies can establish their own policies regarding leaves; there is no specific rule or law governing this.

Regards,
Anu

Dear Anu, Why are you saying that there is no rule or law? There happen to be numerous laws relating to different types of leaves, such as the Factories Act, 1948, The Maternity Benefit Act, 1961, State Shops & Establishment Act, State NFH & C & S Act, etc. We need to examine which of the Act(s) is/are applicable to the establishment and then adhere to the statutory requirements of that particular Act. If none of the Acts is applicable for the grant of leaves, then, of course, leave rules should be framed for its applicability.

R.N.KHOLA

We have engaged some workers on a daily basis. Are they liable for leave during working days if not present, or should we pay their leave amount at the time of final settlement?

Thanks,
Mukesh