Is Casual Leave a Must for SME Leave Policies? Seeking Guidance on Minimum Requirements

Dear Seniors, I am assigned to draft a leave policy for an SME with 100 employees (staff + workers). I have a query about casual leave. Is it compulsory to include it as a part of the leave policy (including PL, SL, and other leaves)? If so, what is the minimum number of casual leaves that can be implemented in an organization?

Warm Regards,
Hrishi

As far as I know, CL is not mandatory. However, as per the Factory Act, one PL has to be given for every 20 days of work, and that too after the employee completes 240 days.

Understanding Leave Policies Under Various Acts

If you are covered under the Shops and Establishments Act, you should adhere to the laws of your state.

If you are governed by the Factories Act, then you must provide one day of leave for every 20 working days after completing 240 days. Additionally, according to the Industrial Standing Orders Act, you are required to grant 10 days of Casual Leave with or without pay based on the model standing orders.

Regards,
Eswar
Manager-HR

Managing others is not an easy task, but managing yourself for good is easier.

Leave Policy Requirements

Every leave is compulsory, whether it is CL/SL or EL. In the Factory Act, a total of 14 CL/SL should be given to an employee in a year, following a 7+7 order. Similarly, in the S&E Act, a total of 12 CL/SL should be provided to an employee, following a 6+6 order. You can also pay these as CL of 12/14 accordingly. If you grant more than 3 days of SL/CL, a medical certificate is required, and it should be marked as SL. Otherwise, all 12/14 leaves should be paid as CL.

Regards,
Nandan Negi

Dear Nandan Negi, please provide the extract of Chapter VIII which specifies that CL/SL is compulsory in a factory.

Regards,
K. Lakshmi Devi

If a company has a policy of 30 days' leave (without bifurcation into CL/SL/PL) in a calendar year, of which 20 days can be accumulated for encashment, is it compliant with all the relevant laws in the state of Haryana?

There is a mistake in your message. To clarify, CL/SL is not mandatory as per current law but is marked in the act to be paid. The rest follows as per company policy.

Best Regards,
K Lakshme Devi

If your company is registered as a factory, you need to follow the Factories Act rules; otherwise, the Shops & Establishments Act applies, and the leave rules are prescribed therein. As long as the leave given to employees or workers is equal to or more than prescribed in the Act, there is no issue whether you categorize it with different names or refer to it as a basket of leaves.

Company Policy on Casual Leave

It is purely your company's policy to provide casual leave. It may be 12 or 15 days per calendar year.

Regards,
Sriram Kumar

Most of the states have an Act called Industrial Establishments (National and Festival Holidays and Casual and Sick Leave) Rules. For example, the Punjab Industrial Establishment (National and Festival Holidays and Casual and Sick Leave) Act 1965 and Rules 1966 Section 3 provides for three National holidays, one each on 26th Jan, 15th Aug, and 2nd Oct. It also provides for four other holidays on any festivals specified in the schedules appended to the Act. Section 4 provides for seven days of casual leave and fourteen days of sick leave in each calendar year in such a manner and on such conditions as may be prescribed. Please refer to the relevant Act and rules for details.

Regards,
RL Dhingra, Advocate, Labour Law Consultant, Delhi
[Phone Number Removed For Privacy Reasons], email: [Email Removed For Privacy Reasons]