Are Companies Required to Offer CL/SL? Seeking Clarity on Leave Policies

Dear Seniors, I have a question in mind for which I need your guidance/clarity.

Mandatory Leave Facilities

Is it mandatory for companies to provide CL/SL facilities to their employees? If yes, how many CL/SL days are mandatory, and what is the formula for calculating these leaves?

Thanks and Regards,
Satinder Pal Singh
[Phone Number Removed For Privacy Reasons]

Sub- CL/SL in Companies

If your establishment is a factory, you have to provide for annual leave under Sec. 79, which can be availed on sickness grounds. However, the ESI Act 1948, which covers factories, permits an employee to remain absent from duty for treatment of sickness or disablement during which they are entitled to wages calculated in the manner prescribed under the ESI Act.

As regards CL, it is provided for under the model standing orders of each state. A factory employing 100 or more workmen is also covered by the Industrial Employment (Standing Orders) Act 1946. Therefore, you have to provide for CL as per the model standing orders of your state since a factory is also covered by the Industrial Employment (Standing Orders) Act 1946.

If your establishment is a commercial establishment, you need to provide for leave as admissible under the Shops and Establishments Act of your state. The Shops Acts of some states provide for casual and sick leave also, in which case, you need to provide for them, while others, like the Bombay Shops and Establishments Act, provide for only one kind of leave (earned leave) which can be availed on sickness grounds. However, in some states like Maharashtra, the shops and commercial establishments are also covered by the Industrial Employment (Standing Orders) Act. In that event, you need to provide CL also as per the model standing orders.

If your commercial establishment is also covered under ESI by government notification, the employee is also eligible for sickness benefits available under the ESI Act. For example, shops and commercial establishments are covered under ESI by government notification in the state of Maharashtra. Please verify the status with regard to your state.

Hope this clarifies your doubt on the mandatory nature of CL/SL.

If your establishment is covered under the Sales Promotion Employees Act 1976, you need to provide CL and SL as prescribed under the said Act to sales promotion employees.

Hope this will clarify the mandatory nature of CL/SL.

Regards,
B. Saikumar
HR & Labour Law Consultant
Chipinbiz Consultancy Pvt. Ltd
Mumbai

Thank you for your response. We are neither a factory nor any kind of shop or involved in commercial activities. We are a placement agency. Could you please guide us on which act or rules our office falls under for CL/SL?

Thanks and Regards,
Satinder Pal Singh

Our establishment is a commercial establishment. You have to provide the following leaves per annum:

- PL: 21 Days
- CL: 4 Days
- SL: 5 Days

As per your information, EL/PL & CL are defined under the Shops & Est. Act and Industrial Standing Order Act, which is correct.

Explanation of Sick Leave (SL)

Please explain in detail about SL and the number of sick leaves available to employees under which act and under which section.

Regards,
PHIPL

Since your establishment is a commercial one, you will be governed by the Shops and Establishments Act of your state. The Shops Acts have provisions for EL/PL. However, the Shops Acts of some states also include SL and CL, while others, such as the Bombay Shops Act, do not provide for SL/CL. Therefore, please refer to the Shops Act of your state and accordingly provide for leave.

Regards,
B. Saikumar
HR Labor Law Advisor
Mumbai

Clarification on Leave Policies Under Various Acts

The Bombay Shops & Establishment Act is applicable to us. According to the act, only Earned Leave (EL) or Paid Leave (PL) is mandatory. However, when we consider the Standing Orders Act, only Casual Leave (CL) is mentioned under Section 10. It is not clear about the number of CL days that will be available. Additionally, in the case of Sick Leave (SL), it is not defined.

Please suggest how much SL should be made available or under which act it should fall instead of ESIC.

Regards.

Even though the Bombay Shops Act does not provide for Casual Leave (CL) or Sick Leave (SL), you can still offer them. If the model standing orders under Bombay Rules do not specify the number of CLs to be provided, you have two options:

1. You can fix the number of CLs as per the model standing orders under central rules, which is ten in a calendar year.
2. You can follow the practice adopted by other placement agencies in Mumbai.

There is no Act applicable to you other than the ESI Act, which provides for SL. You can provide it on your own or follow the practice adopted by other placement agencies in Mumbai. Public sector banks grant 30 days of SL on a half-pay basis in a calendar year.

Regards,
B. Saikumar
HR & Labour Law Advisor
Mumbai
[Phone Number Removed For Privacy Reasons]

It means SL is not compulsory. Even if it is available from earlier, it can be stopped immediately or at any time with the consent of authority.

If any facility is being enjoyed by the employees/workmen as customary for a considerable time, it acquires the character of a service condition and then it cannot be stopped immediately without following the procedure under Sec. 9-A of the Industrial Disputes Act (if the employees affected are workmen within the definition under the Industrial Disputes Act). However, commercial establishments in Maharashtra are also governed by the Industrial Employment Standing Orders Act, provided they employ 50 or more employees. Therefore, you need to verify whether the model standing orders under Bombay Rules provide for SL. After considering all these aspects and implications, you can take a prudent decision.

Regards,
B. Saikumar
HR & Labour Law Advisor
Mumbai
[Phone Number Removed For Privacy Reasons]