Understanding Leave Allocation in Chennai: Is It Defined or Management's Choice?

Hi Seniors, I would like to know how many leaves can be allocated towards casual leave, sick leave, and earned leave (Chennai). Is the number of leaves allocated defined anywhere, or is it at the complete discretion of the management?

Regards

Calculation of Leave Days

CL and SL are totally management decisions, but find the calculation as follows:

- 1 Year = 365 days
- 365 - 52 Sundays = 313 working days
- 313 - 10 days of holidays = 303 working days
- 303/20 = 15

EL = 15 days

As per my knowledge, the earned leave count differs based on the organization's mode of operation, primarily the number of workdays per week. For example, an organization with 6 working days a week will have a different calculation compared to one with 5 working days a week.

In general, according to the Shops and Establishments Act, for every 20 working days, an employee should be entitled to one earned leave.

Leave Rules Under Shops & Establishment Act

As per the different leave rules, the leaves pertaining to Privileged or Earned leave are given as 1 day for every 20 working days. Under the Shops & Establishment Act, the following is observed:

- Casual Leave: 12 days of leave may be permissible. This leave can't be combined with Sick Leave. Casual Leave will be calculated on a pro-rata basis if a person joins in the middle of the calendar year.

- Sick Leave: 12 days of leave may be permissible. Any intervening holiday or weekly offs will be treated as Sick Leave, and if the employee joins in the middle of the calendar year, it should be calculated on a pro-rata basis.

- Earned Leave/Privileged Leave: Those who are in continuous service (should work not less than 240 days) in the preceding 12 months are eligible for 15 days of P.L. during the subsequent year. If a person joins in the middle of the calendar year, he is not eligible for Earned/Privileged Leaves until the completion of 12 months of service.

- Maternity Leave: As per the Maternity Benefits Act 1961.

Leave Rules Under The Factories Act, 1948

For the leaves pertaining to The Factories Act, 1948, please refer to Chapter VIII on [annual leave with wages] for the CL and SL. Check for the state provisions on Industrial establishments applicable.

Chennai leave rules are quite different from others. There are 12 days of casual cum sick leave that can be utilized. There is no breakdown of these leaves.

You can find these sets of rules in the Shops and Establishment Act of your state. If you are in an industry, then refer to the Factories Act for annual leave. If there is a union associated, the rules are determined through mutual discussion.

Leave Rules Based on Employment Type

Leave rules depend on the nature of the place of employment. If it is a factory, one has to follow the provisions given in Chapter VIII of the Factory Act 1948. State governments have the right to make rules regarding leave in their states in accordance with the Factory Act. If the place of employment is an office or any other commercial establishment, one has to follow the Shop and Establishment Act or any other acts enacted by the particular state for such purposes.

Leave Guidelines in Tamil Nadu

In Tamil Nadu, clear guidelines have been provided in Chapter VI of the Tamil Nadu Shops and Establishment Act 1947 regarding holidays with wages, sick leave, and casual leave if the place of employment is a shop or any commercial establishment.

Regards,
Arul Manickam
HR & Legal Consultant, Chennai

Leave Allocation Policies

Leave allocation depends on the company. It is an internal management decision on how much leave should be allocated for Casual Leave (CL), Earned Leave (EL), and Sick Leave (SL) within a year. Every company has different leave policies. However, as per the Shop & Establishment Act, employees should receive one EL for every 20 working days.

Regards

You may go through the government leave rules. There are state leave rules for industries or establishments. As per central leave rules for industries:

- Minimum:
- 7 CL
- 7 SL
- 3 national holidays (26 Jan, 15 Aug, 02 Oct)
- 5 festival holidays (two half-day festival leaves in lieu of a festival leave optional as per agreement between workers and employer under intimation to area inspector)
- EL (as per Factories Act, one for 20 working days, total accumulation not more than 30 in any account, can avail three times in a year)
- Compensatory leave (a leave for work on any off or holiday compulsory to avail in the next month)

Except EL, all CL and SL are liable to lapse after the last calendar day. Any kind of leave cannot be clubbed with another kind of leave. Leave matters should follow minimum as per state leave rules. Kindly go through the state leave rules for industries.

There are separate leave rules for the shop and establishment and separate for industries. Moreover, other leaves under various acts like Maternity Act, ESIC Act, Factories Act. Leave matters are not a company or industries matter; they are controlled by state rules for industries. Every industry is liable to give at least the minimum standard of leave as per state rules.

Regards,
Ramesh Kumar Panchal
[Phone Number Removed For Privacy Reasons]

My company is in the BPO sector, handling US, domestic, and national projects, and we are located in Chennai. They have defined 12 days of SL & CL and 12 days of EL. My question to the management was that SL and CL should be differentiated. They informed me that it is clubbed as a total of 12 days, and nowhere in the law is it written. Finally, they ended up saying that they will revise SL & CL to 10 days and EL to 12 days.

Regards, Narinder

Please confirm my analysis from your posts and clarify it for me.

Leave Allocation Analysis

An employee is eligible for 7 Casual Leaves, 7 Sick Leaves, 3 National Holidays, 5 Festival Holidays, along with Earned Leaves of one per every 20 working days. In that case, the total count of leaves to be provided should be 7 + 7 + 3 + 5 + 15 = 37. However, we have an internal leave policy where employees get 15 Earned Leaves on a pro-rated basis of 1.25 every month. In this policy, we have specified those 15 earned leaves as 7 Casual Leaves, 8 Sick Leaves, and 11 Company Holidays covering festivals and national holidays. Therefore, we are providing only 26 leaves to the employees. Do you think employees are exploiting this situation?

Thank you.

As I told you regarding the leave policies, regardless of the total number of leave days, all regulations depend on Indian labor laws. You may have your own leave policy, but you must adhere to the minimum leave standards provided in various labor laws.

Clarification on Leave Entitlements

For further clarification, all employees covered under the Employees' State Insurance Act are not entitled to Sick Leave (SL) or Earned Leave (EL) for 20 days of work under the Factories Act, as stated in the leave chapter. It is not permissible to manipulate the Factories Act, 1948, Section 79. Additionally, three national holidays and five festival holidays are compulsory, and there is no way to avoid them under labor laws. (The allocation of the five festival leaves depends on the state festival holiday schedule; you may refer to that.)

Compliance with Labor Laws

As HR professionals, we must urge management to comply with government labor laws. The working class has always been exploited in one way or another, but it is essential to keep yourself updated.

I hope all the facts regarding leaves are now clear to you. If you have any further questions, please feel free to ask.

Regards

Dear Sir, I want to know the Leave Policy regarding the points below:

1. My factory is situated in Bhiwadi, Rajasthan. Is the Leave Policy applicable under the Factories Act or the Shop and Establishment Act?

2. My corporate/registered office is located in Delhi. Which Leave Policy is applicable?

Kindly send the notes.

Thanks,

Regards, Dev Kumar Gupta Victor Cables Corporation Limited

As per the TN Shops and Establishments Act, 12 days of earned leave (EL), 12 days of casual leave (CL), and 12 days of sick leave (SL) are to be provided. Additionally, an accumulation of up to 45 days for the purpose of encashment during separation is permitted.