Guidance on Leave Policies and State Regulations Compliance

Hi, I am working in a brokerage firm where we are provided with PL12 per year, CL6 per month, and SL6 per month. CL and SL are not carried forward, but 5PL is carried forward. Is this the right policy to adopt? Should any changes be made?

Dear Jeno,

As per Section 35 of the Bombay Shops & Establishment Act:
Every employee who has been employed for not less than three months in any year shall, for every 60 days on which he has worked during the year, be allowed leave, consecutive or otherwise, for a period of not more than five days.
Every employee who has worked for not less than two hundred and forty days during a year, irrespective of the date of commencement of his service, shall be allowed leave, consecutive or otherwise, for a period of not less than twenty-one days. Provided that such leave may be accumulated up to a maximum period of forty-two days.

So, kindly prepare your leave policy accordingly.

Leave policy differs from state to state as per the Act and from company to company. Beforehand, please check whether you give 6 CL & SL per month or per year. It should be per year; I suppose it is a typo error. I would rather suggest giving a maximum limit of PL for carry forward instead of 5 PL every year. It is always advisable to refer to the S&E Act of your state and have a discussion with the management about the leaves before framing it into a policy.

The Bombay Shop & Establishment Act allows 21 days of leave for every full year of work (240 days or more). There is no distinction in the act for PL, SL, CL. Since your employer allows more than 21 days, that is okay. However, the act also provides for the carry-forward of unused leave of up to 42 days. Therefore, that part of your rules may need to change.

Dear Friend,

While framing the Leave Policy, you have to consider the local Shop & Establishment Act and Rules in the case of an establishment. Similarly, in the case of a Factory or Plant, it should be in accordance with the Factories Act. So, you should follow the leave rules as prescribed in the statute. If your policy allows for more leave than the statute, it is always acceptable. But under no circumstances, it cannot be less than the leave permissible under the aforementioned Act and Rules. In other words, the leave Policy cannot be contrary to the Act and Rules as applicable.

Regards, Sibabrata Majumdar Management Consultants - Legal & HR Kolkata Mb: 9830023706