How Can We Revise Our Earned Leave Policy and Ensure It's Fair for Everyone?

How to Modify the Earned Leave Policy

Please suggest how to make changes to the Earned Leave policy. It is already documented in the employees' handbook, but now the company wants to modify it. Who determines whether the revised policy is appropriate or not?

Please help.

Regards,
Tavisha

It should be as per the EL rule laid down in the Factory/Shop & Commercial Establishment Act. That should be fair and aligned with the regulations.

The Act states that every employee who has completed 240 days in an organization without any break is entitled to 1 day of EL for every 20 working days. Some organizations do not allow employees to take EL if they have not completed their probation period, i.e., one year or less than one year. The entitlement would commence from the employee's Date of Joining. Based on this criterion, every year an employee would be entitled to 15 EL days (if any availed). The maximum accumulation could be 300 days. It depends on the company policy whether the leave cycle will be treated as a Financial Year or Calendar Year.

You may draft your EL policy by considering the above factors.

Regards,
Jitender

Hi Jitender, thanks for the reply. But what if the company needs to change it? For example, earlier all the EL would be credited at once, but now on a monthly basis, and that too for those who are leaving the job. So, is it valid to do so?

Regards,
Tavisha

What rule binds your company, whether it is the ID Act, the S&E Act, or the Negotiable Instruments Act? Based on this, the rest can be done. You can make a few alterations and implement what I read in your post above; communication is the key (effective communication). This also needs to be updated at all locations that have the leave policy.

Best regards

You can change the policy to provide leaves monthly instead of all at once. As Adeb mentioned above, effective communication is key. Plan and prepare employees, explain how the change will benefit both employees and employers, and publish the policy. This approach can help you gain acceptance from the majority of employees.

It is okay to credit the ELs on a monthly basis as long as the annual rules laid down by the Factory Act are met. It is easier to manage for the HR and also beneficial for the employees to plan their leaves. In my opinion, it is a win-win condition.

Regards,
Sunil

Please ensure that the number of leaves as per the new policy is not less than that of the earlier one.

Regards,
Swarna