During my MBA and professional career in corporate houses, I faced this question repeatedly. Currently, as a student of CS under ICSI, I study different cases and corporate laws in detail, clause by clause, section by section. I spend 8-10 hours studying, in addition to taking care of business. I don't understand why this question is raised. I am trying my best to comprehend it from a managerial, financial, and legal compliance perspective. I hope that after completing my regular MBA and being a student of CA/CS, I will have the competency to grasp this critical issue.
What Do the Laws Say About Holidays?
Legally, there should be three mandatory paid holidays, namely:
1. Jan 26
2. Aug 15
3. Oct 02
4. Any specified day/date mentioned by the Government of India, its branches, or the Judicial system as per constitutional requirements, following the Constitution of India. For example, the government has the right to declare holidays during a national emergency like war. All companies/firms (PVT, LLC, Public, etc.) are required to comply with such instructions.
Working on National Holidays
We have observed that due to business needs, companies sometimes require employees to work during these holidays, especially in IT/ITES. The question is, can a company legally do this? (I have seen this frequently, working on national holidays like Jan 26, Aug 15, Oct 02 when I was at IBM Kolkata, working for double pay and enjoying fun activities for at least 30 minutes.)
Yes. Now, the question arises - how?
Say, for example, an employee has a monthly fixed salary of INR 22,000 and the total number of working days in that month is 22. So, the per-day salary in that month would be 22000/22 = 1000 (without considering the variable part).
Suppose the month is August, and the company requires employees to work on Aug 15th. Ideally, since August 15th is a holiday, paid leave should be provided. Whether the employee works or not on that day, according to the law, they must receive INR 1000 for Aug 15. Any deduction, in part or wholly, for absenteeism on Aug 15, if made, would be considered illegal. The employee has the legal right to challenge such decisions.
If an employee agrees to work on Aug 15 (not coerced by the employer, but voluntarily), they are permitted to do so. Since it is a paid leave by law, they will receive INR 1000 credited to their salary account in lieu of paid leave, in addition to overtime pay for the hours worked on Aug 15. If the employee works the full day, they will receive an additional INR 1000. Therefore, the total salary on Aug 15 would be INR 2000.
Overtime should be paid as per the clauses mentioned in the appointment letter. Forcing someone to work on Aug 15 is an offense. Working on a national holiday is entirely based on the mutual understanding of the employee and employer, more of a goodwill gesture. If an employee is unwilling to work even for overtime, they should not be pressured to do so.
Election Day as a Holiday
Election day is a holiday as directed by the Election Commission of India. All companies, whether LLC, PVT, or Public, are required to adhere to the Election Commission's guidelines. Violating this would mean interfering with someone's fundamental rights and duties as outlined in the Constitution of India. This also implies a challenge to the Election Commission, with no mention of compensating for work.
Who is Eligible for Leaves?
Only Indian citizens who have the right to vote on that particular election date. For example, if the office is in Kolkata and April 23, 2014, is the date of voting in Kolkata, then April 23, 2014, should be a holiday for all employees in Kolkata who will vote. It does not apply to employees whose residence is in Delhi or Birbhum, West Bengal, if the election date is different and they prefer to vote from a different location.
Can a Company Ask Employees to Work on Weekends or Sundays to Compensate for the Holiday Due to the Election?
No. An employer (firm, company, PVT company, LLC, Public) can request employees to work on Sundays/weekends, but it should be in accordance with the clauses in the appointment letter, regarding overtime. Therefore, the guidelines, procedures, laws, or rules followed during normal situations for overtime or work on weekends/Sundays should be followed. It should have no connection to "compensating for the holiday due to the election." Since working on weekends/weekly off/Sundays is equivalent to overtime, mutual negotiation for overtime must be followed here.
If an employer asks an employee to work to compensate for a holiday due to the election, it would be considered illegal.
Example:
Suppose April 23, 2014, is a holiday due to the election. Now, if the employer wants employees to work on April 27, 2014 (Sunday), they must follow the normal rules, laws, guidelines, clauses in the appointment letter, and procedures followed during work on normal weekends/Sundays. Such as paying overtime for working on Sundays/weekends. This should not be linked to compensating for work due to the holiday for the election. If any employee claims otherwise with evidence showing that the employer forced employees to compensate for the holiday due to the election, the employer would be violating legal compliance and could be legally challenged.
Regards,
Sovik B
MBA, HR and Finance
Managing Director
S.S. ENTERPRISE
Ph: [Phone Number Removed For Privacy Reasons], E-Mail: [Email Removed For Privacy Reasons]