Is It Fair to Limit Leave and Deduct Salary for Extra Days? Seeking Industry Insights

I am working with a logistics company. The leave structure here is 7 CL, 8 SL, and 15 PL. Only PLs are carried forward, while CL and SL are not encashed and lapse at the end of the year. Now, the management wants employees to take CL, SL, and PL on a pro-rata basis only. For example, CL can be taken only once every two months. They also want to incorporate a salary deduction if an employee takes more than that in a particular month.

Industry Practice Inquiry

Is this an acceptable and practiced trend in the industry? Most employees usually are well within their leaves at the end of the year, so is this a fair policy?

Kindly advise.

Yes, as per the eligibility, only you have to avail. Generally, some employees will avail a greater number of leaves and leave the company without any intimation or information.

Compliance with Leave Rules

If you are allowed to avail your eligible leaves, then you have to comply with the leave rules of the company. In emergencies, the company should also allow employees to use the leaves; for example, if an employee is sick, then they have to allow it. This depends on the relationship. I believe that earlier they might have allowed it, but they might have found some foul play, hence they want to be stricter.

Regards,
Kamesh

Management can do this, but for that, they have to change their HR policy too. In our company, we have 7 Casual Leaves. We have made policies like:

i. Casual leaves will not be allowed to be combined with Earned Leave or Sick Leave.

ii. An employee joining the company in the midst of the calendar year will be allowed casual leave on a pro-rata basis.

iii. An employee can avail up to two days of casual leave in a quarter, subject to a maximum of seven days in a year. However, the unavailed leave of the previous quarters can be combined and availed in the succeeding quarter, but at a time not more than three days of casual leave can be availed.

So, you can also define it like this.

iv. For availing a casual leave, an employee must ensure that his application reaches his controlling officer at least one day in advance, and his consent is obtained.

Thank you.

Regards

I do not know about your company, but in most companies, leaves are credited only after the completion of 6 months or a year. This means employees receive leave based on their work in the previous year. Therefore, asking them to take pro-rata leave makes no sense. It should be the employee's choice when to use their leave. If you allow employees to take leave during the first year, then pro-rata makes sense.

Regards.

I agree with Ratikanta Rath's model. Every organization should formulate its own policy according to the nature of employment they are providing.

Regards,
SURENDRA JAIN

I would like to know whether the CL should be 12 days in a year as per law.

As per statutory regulations, the number of days for Casual Leave (CL) is not defined. Companies provide CL based on their HR policies, but for Earned Leave (EL), a minimum of 15 days is defined.

Regards,
Ratikanta Rath

Understanding Statutory Leave Requirements

EL is the only leave which you have to pay to your employees statutorily. To avail of EL leave, employees have to work a minimum of 240 days in a year.

Company Leave Policies: CL and SL

CL and SL leave depend upon company leave policies. Even though you may not have any CL and SL in your HR policy, it is not going to create any problems since it is not mandatory statutorily record-wise. However, you have to give them a minimum of 15 days of EL (Earned Leave), which they can avail of in the next succeeding year.

Regards,
Ratikanta Rath

Hi Saswata, CL, SL, and pro-rata PL are given upon completion of 6 months (until the approaching January). However, fresh leaves are credited in January.

Understanding Leave Sanctioning Authority

We have a wrong notion that we could sanction leave beyond what is mentioned in the standing orders or appointment letter. In my opinion, we don't have the power or authority to sanction leave beyond the eligible leave for an employee, such as Casual Leave (CL), earned leave as per the Factories Act or Shop Act, and sick leave. If an employee's absence is permitted, they could be marked as on authorized absence (AA), and in the case of absence without permission, they have to be marked as on unauthorized absence (UA). In the case of absence on medical grounds with an ESI certificate, they may be marked as on medical grounds (AM).

The Factory Act and Shop & Establishment Act provide for leave after working for 240 days, meaning that employees will be eligible for leave after one year of working. However, in this company, leaves are allowed after 6 months. It is important to note that nothing in the law prohibits the employer from granting more leave than what is mandated by the law.

In that case, enforcing a pro-rata rule makes sense. In normal cases, you will only get leave after completing one year.

Pro Rata Leave Policy Inquiry

Can the pro rata be done away with if we credit only CL and SL pro rata and credit PL after 1 year of service?