Understanding Holiday Pay Rules in Manufacturing: Do Absences Affect Entitlement?

Holiday Rules for Workers in the Manufacturing Industry

What are the holiday (National/Festival) rules for workers in a manufacturing industry? Management declares 10 days as National/Festival Holidays at the start of the year. If October 2nd, 2012, is declared a holiday and a worker is absent on October 1st, 2012, and October 3rd, 2012, the days preceding and succeeding the declared holiday, will the worker be entitled to the wage for October 2nd, 2012, the declared holiday?

Kindly enlighten me with the rules and regulations pertaining to holidays (National/Festival).

Regards,
A. BAKSHI

Have you consulted the Tamil Nadu Industrial Establishments (National & Festival Holidays) Act, 1958, which provides for National and other holidays and also stipulates that national holidays should be paid holidays for all workers regardless of the duration of leave taken? It is unnecessary for you or the management policy to complicate the issue by discussing preceding and succeeding days. This practice is an attempt to circumvent the provisions of the law. Despite the law being comprehensive to cover every conceivable situation, lawmakers cannot anticipate all the tactics that lawbreakers may employ to exploit and deprive others of their entitlements.

If your company believes in upholding the spirit of the law and principles of natural justice, you should consider the declared holiday as a paid holiday, irrespective of whether it falls before, after, or amidst any working day, holiday, closed holiday, or weekly off. This approach is crucial to prevent individuals from taking undue advantage, and it sheds light on why our laws are lengthy and repetitive — to avoid such situations.

Please do not hesitate to reach out if you need further clarification. I acknowledge the challenges and dilemmas faced by HR professionals, especially those who are new to their careers.

Warm regards.

Dear Human Resource Practices and Sunita Meena,

Could you provide justifications for your statements? It is clear that the employee was on leave for 3 days. The point at issue is: "Will the worker be entitled to the wage of October 2nd, 2012, the declared holiday?"

Could you please explain or justify with citations why a worker should be deprived of wages for being on leave on October 2nd, which is a declared national holiday (meaning it is a paid holiday)? I find it interesting that HR professionals are acting less like HR and more like Finance & Accounts. Instead of ensuring fairness (if not being liberal) in employee matters, they seem more interested in curtailing and reducing employee benefits. Being "Conservative" is an accepted accounting principle.

Warm regards.

Please note that Mr. Bakshi has mentioned "Absent" not "Leave," and it's unauthorized. If a person is absent for a long period and a national holiday falls in between, I think they are not entitled to take it as a Paid Absent.

You would be surprised to note that more than 25% of the salaries paid to employees are towards their leave! How many businesses have factored this into their costs? I think HR is for the company and for the employee as well. Workers who do not adhere to the leave policy of the company should be addressed by HR, as far as HR's point of concern.

By the way, please note that the opinion contained in the reply is merely "advisory." For one reason or another, because holidays and leave policies (Paid Leave/holiday) of establishments are generally regulated by the nature of the business, project deadlines, global HR policy, and the geographical area the companies cater to... You can still correct me if I am wrong.

Regards.

Thanks for your efforts and time to respond promptly. Such interactions with a wide cross-section of HR professionals, I believe, are very useful for professional development. I gather from your response that there is no statute or rule that denies the lawful payment of wages during declared paid holidays. We, as HR professionals, have to ensure that if an employee is on the roll and, for whatever reason—genuine or otherwise—he is not able to attend duties (which he can validate later with proper documentation), he should not be deprived of his rightful claim to wages.

Response to Your Points

#1: Yes, it is mentioned as absent and not leave. Unless an employee has notified earlier and taken prior approval, this is always the case. It's only upon joining back after a leave of absence that an employee submits his application (ex-post-facto) for leave, wherein it is also mentioned the kind of leave and duration, which is then regularized upon approval by the HOD or competent authority. Simply proceeding on leave (with or without approval—depending on the exigencies) does not entail that the employee forgoes his rightful claim on a paid holiday. Even if he has no leave credit in his account, he is eligible for one day leave with pay if we are to act lawfully, justly, and fairly; else you can continue to "think he is not entitled to take it as a Paid Absent." The problem is there is no one to challenge the validity of the action of HR. (The management or seniors will not, as it suits them; and there are no trade unions to take up the issue on behalf of the workman.)

#2: Yes, I would be surprised to know, as you say, "25% of the salaries paid to employees are towards their leave!"

I think your data is not correct.

Can you substantiate it with facts and figures? Do you understand what 25% means? It means that an employee gets one day leave for every three days of work! In which organization is it possible? Not even in government service. It also means that if 25% is paid in leaves, then what about the following components: welfare, canteen, medical, transport, HRA, salary, LTC, CPF, gratuity, insurance, etc. The figure given by you is an exaggeration unless you can furnish some verifiable data.

#3: I appreciate you for indicating that your opinion was "advisory" in nature. Apart from the factors given by you which regulate the leave, the most important factor left out by you is the government legislations, acts which are applicable and which have to be followed compulsorily; any violation is punishable under the law.

To conclude, I would like to add that my intention here was to engage our members in meaningful interaction, encourage their spirit of inquiry, and provide more learning opportunities beyond just merely answering a specific query, and I thank you for your willing participation.

Warm regards.

Madras High Court Judgment on Holiday Wages

A classic judgment is attached herewith from the Madras High Court in 1979 in the case of Madura Coats. In this case, employees were being denied wages for declared national holidays because, during that period, workers were not attending duties due to a strike.

Warm regards.

Leave Entitlement on National Holidays

The point of leave on the 2nd of October is not an issue. It has to be paid to him whether he is on leave one day prior and one day after the national holiday. Now, the question is whether he has applied for SICK LEAVE or EARNED LEAVE (PRIVILEGE LEAVE) for those days. He cannot be entitled to CASUAL LEAVE for those two days (one before and one after the National Holiday).

Holiday and Leave Policies

Holiday and leave policies differ from one establishment to another and vary from one state to another. A holiday that falls in between two leaves shall be treated differently. A holiday that falls between paid leave (PL/EL) or sick leave (SL) or loss of pay will be counted as a holiday and leave. On the other hand, it will be treated as leave, not as a holiday.

Please let me know if you need any further assistance or clarification on this matter.

After going through the discussions, I am surprised that the very contents of the query are being ignored. In general, if a workman/employee keeps himself/herself absent (I repeat) absent without information/prior approval, can the absence be counted as leave legally without foreseeing the repercussions?

Inclusion or Exclusion of Declared Holidays

As far as the inclusion or exclusion of any declared holiday falling in between the authorized leave is concerned, it is not uniform overall. Some include while others exclude this, as governed by their related policies/SOP.

Regards,
J.S. Nadar

Dear Mr. RajKumar,

Holiday and Leave Policies for Employees

Following is the list of holidays and leave policies available to employees. These may vary slightly depending on customs and rituals followed:

National Holidays

These holidays are declared compulsorily, and establishments do not have flexibility in timing them. The dates are as follows: 26th January, 1st May, 15th August, 2nd October, and 1st November.

Festival Holidays

Five festival holidays in each calendar year must be declared in addition to the National Holidays.

General Elections

In the case of general elections to the Lok Sabha and Vidhana Sabha, and in the event of any by-election, a holiday must be declared for all employees on polling day.

Weekly Holidays

Every establishment is required to remain closed for at least one day of the week. The employer shall fix this date at the beginning of the year.

Annual Leave with Wages

Every employee in an establishment is entitled to leave with wages, calculated as follows:

- **Earned Leave:** One day for every twenty days worked. This equates to about 1.5 days a month and 18 days per annum.
- **Contingency/Sick/Medical Leave:** Every employee is entitled to leave with wages for a period not exceeding twelve days, due to sickness, accident, or any other reasonable cause.

Carry Forward of Leave Balances

If an employee does not take the whole of the leave allowed in a calendar year, any unused leave shall be added to the leave allowed in the succeeding calendar year. The total number of days of leave that may be carried forward should not exceed thirty days. Excess leave will either expire or be paid to the employee as Leave Encashment.

Other Leaves

Other leaves include Maternity leave, ESI leave, etc. The national, festival, and weekly holidays declared by the establishment need to be prominently displayed at the place of business and should be reported to the Labour Department every calendar year.

The table below summarizes the minimum leave/holidays requirements for an establishment:

- **National Holidays:** 5 days
- **Festival Holidays:** 5 days
- **Weekly Holidays:** 52 days
- **Earned Leave:** 18 days
- **Contingency Leave:** 12 days

Total: 92 days

Total number of days in a year: 366 days

Leaves: 92 * 100 / 366 = 25%

The total of 92 days mentioned in the above table may seem quite a lot, but in actual practice, if one were to include holidays that an employer is forced to declare because of frequent bandhs, the demise of prominent personalities, etc., we are left wondering whether we work at all!

This is based on what I have read and understood. My seniors can correct me if I am wrong because I am here to share and gain knowledge.

I believe making mistakes is always forgivable if one has the courage to admit them.

Regards,

Holidays List for Andhra Pradesh Factories & Establishments

Please find the Holidays list under the Andhra Pradesh Factories & Establishments (National Festival) and Other Holidays Act, 1974, for the year 2013.

Regards

This will count as a three-day leave, but 2nd October is a national holiday and a paid leave day. Therefore, you will consider only two days of leave, which are 1st October and 3rd October.

With regards,
Meenu

Dear Bakshi, I work in a central government undertaking where our section operates 24/7, 365 days a year. If we are absent, for example, on 1st October and 3rd October, we should have it sanctioned in advance. If we take casual leave on 1st October, then we can take compensatory time off (if any is available from working on any previous holiday) on 3rd October. If this process is not followed, then the three days' absence has to be regularized using sick leave, and the employee is allowed to return only after obtaining a 'fit certificate' from the company's doctor. Hence, in your case, if the employee has not taken pre-sanctioned leave either on 1st or 3rd, then he has to apply for leave on 2nd as well.

Regards, S. Kumar MBA (HRM)

Raj Kumar and Sunita have their valid arguments, and I respect them. I want to examine the issue from the point of law and prudence.

Legal Perspective on National Holidays

When the law in a particular state grants a national holiday with wages, the employer cannot treat the absence as unauthorized on that day, even though the employee remained absent on the day subsequent to the national holiday. An interpretation favorable to this view is found in Sec. 79 of the Factories Act, which excludes holidays falling during leave from being part of leave. Even assuming that, in the instant case, the employee is treated to be unauthorizedly absent on the days prefixing and suffixing the holiday, the spirit of the Factories Act seems against denying this benefit of the national holiday to the employee, going by the above provision. The employee may always say that he would have reported for duty on 2nd October if it had been a working day.

Disciplinary Action Considerations

Secondly, if the employer intends to take disciplinary action for being unauthorizedly absent for three days, the action may invite controversy as the employee will have grounds to contest such a show-cause notice as being patently wrong and untenable.

Prudence in Legal Interpretation

So far as prudence is concerned, if there is doubt as to the applicability of a particular law to a particular situation, it is better to err on the side of the law to avoid an unpleasant situation.

Regards,
B. Saikumar
HR & Labour Law Advisor
Mumbai