Struggling with Notice Period and Leave Policies in IT: How Do I Decide What's Best?

I am working as an HR for a company. I have never been involved in designing the policies from scratch. I am stuck at two points:

1. Deciding the Notice Period

How do I decide how long the notice period should be for employees in my organization?

2. Designing the Leave Policy

I need to design the leave policy. How can I decide how many early leaves should be allowed for my organization? Should it be 12, 20, or another figure? How do I determine the exact number?

Kindly help. I am working for the IT Industry.

With best regards,
MADHURA

Review the organizational needs and the performance required by the employees for that industry type. All policies and procedures are decided only on the basis of the employment situation.

Notice Period Determination

Decide on the time period as it varies by sector and employer; however, the standard notice period in numerous firms is one month. If the employer chooses the employee to work and relinquish the duties, it requires a certain amount of time. You may check with the management for having a modus operandi (notice) to follow.

Designing the Leave Policy

The leaves depend state to state and the type of act that your industry is registered under, in case of the Shops Act.

- **Casual Leave:** It is calculated in a calendar year. Casual leave is given for 12 days and shall be calculated on a pro-rata basis if any employee joins in the middle of the calendar year. Casual leave cannot be taken twice a month or more than 3 days at a stretch nor can be clubbed with other leave at the same time. Unutilized leave would be lapsed at the end of the year.

- **Sick Leave:** It is calculated in a calendar year, and 12 SL days can be allotted to employees. Any employee joining in the middle of the calendar year shall be taken on a pro-rata basis. Any sick leave beyond 3 days at a stretch needs to be accompanied by a medical certificate from an authorized Medical Doctor/Practitioner. Unutilized leave would be lapsed at the end of the year.

- **Earned Leave:** Those who are in continuous service in the preceding 12 months (should work not less than 240 days) are eligible for 30 days [varies excluding the National & Public Holidays] E.L. during the subsequent year. If a person joins in the middle of the calendar year, he is not eligible for Earned Leaves until the completion of 12 months' service. Earned leave can be encashed if it is unutilized only at the end of the calendar year.

Earned Leave under The Factories Act, 1948; for every 20 days worked, one day leave is provided. It is also necessary for the company to carry forward only up to 30 days E.L. and the balance leave above 30 days to be encashed on the basic salary. The Factories Act has the provision of Earned/Annual Leave and doesn't have the provision of Casual/Sick Leaves. Please refer to section 79 (Annual Leave with wages).

Regards

While agreeing with all points of Sharmila, I would like to add that in case you are working on a 5-day week, the earned leave (EL) given is normally 21 days for a year.

In regards to the notice period, you could decide depending upon the seniority of the employees. The higher the seniority, the more time required for knowledge transfer, as with seniority, the person's knowledge is more important than the theoretical knowledge. Therefore, you could have a one-month notice period for junior-level employees and a three-month notice period for senior-level employees. This could also be viewed as the more knowledge a person possesses, the longer the notice period.

Leave policy depends on two things:

1. How many paid leaves is the organization willing to give per employee on an annual basis?
2. What is the designation and experience of the employee?

I see that the previous suggestions are sensible and hence would recommend you to think over the same.

Notice Period Considerations

As far as the notice period is concerned, think about it based on the following parameters:

1. What is the attrition rate (the rate at which employees are quitting their job)?
2. How important/easy is it to find a replacement?

In cases of high attrition, you will need to recruit more people than required to strike a balance. For this, you should check the time required by an employee to get past the training stage and be job-ready. Here, the time factor has to be taken into consideration.

The second point addresses the job's qualities and how easy it is to find a person of similar expertise. Accordingly, you should determine and be firm about the notice period at the time of recruitment.

I hope this is helpful.

Regards

Thank you so much for the detailed explanation, Sharmila Ma'am. Also, thank you to everyone else for providing your valuable inputs. It will surely help me a lot in designing the policies.

Regards