Can We Customize Our Leave Policy While Staying Compliant with Local Laws?

Hi all, ours is a small organization with between 50 and 70 employees. We have a leave policy in place that aligns with the Karnataka Shops and Establishments Act of 1961.

Compliance with the Act

I have observed many companies not adhering to or being non-compliant with the act. Therefore, I would like to understand if we can have a leave policy of our own that suits our company's requirements.

Procedures for Policy Change

If yes, what procedures should we follow to shift our leave policy? Should we pass any internal resolutions?

Any tips on this matter would be helpful.

Regards,
Avinash

Compliance with Shops and Establishment Act

All the policies have to be framed within the applicable Shops and Establishment Act. Someone who is not following guidelines is always treading on a risky path of being fined to the extent of closure. However, the provision of leaves in the Shops and Establishment Act enlists the minimum number of leaves. So, if you want to give more leaves keeping employee welfare in mind, that is not going to be a problem. Anything below the statutory provisions is a violation.

Regards

Dear Shantanu, Thank you for your response. After thoroughly reviewing the leave policy of the act, I understood that we need to have Earned Leave and Sick Leave. Is it necessary to have the leaves divided into EL, SL, and CL? Or can we just have Privileged Leave and Sick Leave?

Thanks,
Avinash

Your organization can have its own leave and attendance policies in respect of employees, or your organization can get in touch with HR consultants for strategic planning and management as they can assist you with the policies.

Regards,
Chetna Kapita
Recruitment Specialist - HR

If the Shop and Establishment Act under which your organization is covered does not enlist Casual Leave (CL), you may proceed with Earned Leave (EL) and Sick Leave (SL) only. However, it is always beneficial to have a CL policy in place because it addresses personal exigencies that are bound to arise in everyone's life. If you can somehow manage CL, even if it is not in the act, you will be creating an employee-oriented workplace. You must divide leaves into respective categories for ease of operation, applicability of law, and compliance.

Well, Shantanu, I would like to have Privileged Leave instead of Earned Leave. The characteristics of Privileged Leave will be the same as EL. In addition to this, Privileged Leave can also be taken during any emergencies. I have seen a few companies utilize or divide leaves in this method, so I am wondering if we can do the same. It is far easier to manage for HR.

Regards,
Avinash

As far as I know, PL and EL are one and the same. If you come across any differences between the two, kindly bring that to my notice. You are probably referring to mixing PL and CL into one. Legally, you can do this, but since payment needs to be made for PL and if you mix the two, it will accumulate faster, you must ponder before you proceed.