Confused About Leave and Overtime Rules? Seeking Clarity on Factory Act 1948 Compliance

Please, can anyone help me by answering my following queries?

I am an employee of a public sector undertaking.

Leave and Weekly Off Days

1. If an employee takes earned/sick leave for a certain period, will the weekly off day or any holiday during the leave period (in between) be counted as leave? If yes/no, then what is the reason behind it? Our leave rule is silent on this matter.

Overtime and Leave Policy

2. If an employee takes earned/sick leave in a week and the said employee does any overtime in that week, our management is deducting overtime hours from the overtime done in that week. Is our management's activity justified, or does it violate the Factory Act 1948? Our corporation's rule is silent on this matter.

Regards,
Tapan

If the Sunday/Weekly Off or Holidays fall in between the leave period, then the Holidays/Sundays/Weekly Off cannot be considered, and that day will also be counted as leave only. As a matter of fact, one has to work for 48 hours in a week with a maximum of 9 hours of duty in a day. Therefore, if you avail of 1 day leave in a week, then in the remaining 5 days, you will work for 45 hours as normal work. Any excess hours beyond that will be considered as overtime (OT), with double OT pay. For the initial 40 hours (5 days), regular wages will be paid, the next 5 hours will be paid with Single OT, and any additional hours will be paid with double OT.

I hope your queries are cleared. If you have any further queries, please do not hesitate to ask in this forum.

Dear Bhaskarji, I have read in some cases that the weekly off day and holiday will be excluded from the leave for the reason below:

SEC 79(1) of The Factory Act 1948

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.

In the second case, our Management is only deducting 1 hour of single pay per overtime done in that week irrespective of the number of leaves in that week.

Regards,
Tapan

As you mentioned that the company's leave rules are silent about the inclusion/exclusion of weekly offs/holidays, then, as pointed out by yourself, the Factories Act will become the guideline. Therefore, weekly offs/holidays should not be counted in the earned leaves taken.

The case you have described is a clear violation of the provisions of the Factories Act. To clarify it more, can you please share what happens if the following situation occurs: Overtime worked in a week, and leave taken in the next week.

Regards,
Preetam Deshpande

I would like to reply to both of your questions in light of Sections 79 and 80 of the Factories Act, which clearly provide solutions to your problems.

Question 1: Leave and Holidays

1. If an employee takes earned/sick leave for a certain period, will the weekly off day or any holiday during the leave period (in between) be counted as leave? If yes/no, then what is the reason behind it? Our leave rule is silent on this matter.

Answer

Explanation 2 appended to Section 79 prescribes as follows:

"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."

This clearly specifies that the leave provided by the Factories Act is exclusive of any other holidays, meaning the holiday falling in between the period of leave taken by a worker shall not be counted as leave.

Question 2: Overtime and Leave

2. If an employee takes earned/sick leave in a week and the said employee does any overtime in that week, our management is deducting overtime hours from the overtime done in that week. Is our management's activity justified or does it violate the Factory Act 1948? Our corporation's rule is silent on this matter.

Answer

Kindly go through Section 80 carefully, which is reproduced below:

"80. Wages during leave period.—(1) For the leave allowed to him under [section 78 or section 79, as the case may be], a worker shall be entitled to wages at a rate equal to the daily average of his total full-time earnings for the days on which he actually worked during the month immediately preceding his leave, exclusive of any overtime and bonus but inclusive of dearness allowance and the cash equivalent of the advantage accruing through the concessional sale to the worker of food grains and other articles."

The above section clearly specifies that the wages for leave days shall be exclusive of overtime, meaning thereby the employee for the day on which he was on leave shall be entitled to full-day wages without any deduction whatsoever, in addition to the overtime payment entitlement.

In view of the above provision, your management's action is unjustified. However, Clause 8 of Section 79 of the Act provides that the employer, in consultation with the works committee and worker representative, can formulate a leave policy for the worker so that the continuity of work should not be hampered, but that shall be subject to approval from the Chief Inspector of Factories. A policy cannot be against the provision of the Act.

Regards