Types of Leaves in Organizations
Mostly, there are three types of leaves prevailing in organizations:
1. Privilege Leaves / Paid Leaves / Earned Leaves - 16
2. Casual Leaves - 8
3. Sick Leaves - 8
Out of these leaves, casual and sick leaves can be availed only during that financial year, whereas privilege leaves are carried forward to the next financial year and can be encashed.
In some companies, privilege leaves get encashed on a yearly basis, while in others, they get encashed only at the time of separation from the company.
Details of Leave Types
Earned Leaves / Privilege Leaves: These are the leaves earned in the previous year and enjoyed in the following years. They can be carried forward for a quantum up to three years and vary from state to state as per the Shop & Establishment Act. They are encashable on basic salary to the employee. The conditions for taking these leaves usually differ from company to company, but normally, they need to be applied for at least 15 days in advance. These can be clubbed with sick leave if the sick leave balance is insufficient.
Casual Leave: These leaves are granted for certain unforeseen situations or when you are required to take one or two days off. Normally, companies restrict a maximum of three days in a month for casual leave. In these cases, either the person has to take permission in advance or it has to be regulated upon joining. This leave is normally never clubbed with privilege leave, but it can be clubbed with sick leave if there is no sick leave balance. Again, the quantum varies from state to state as per the Shop & Establishment Act; normally, this leave is not encashable or carried forward. To attract people or reduce absenteeism, at the year-end, the balance of casual leave is converted to privilege leave in the leave account.
Sick Leave: As the name suggests, these leaves are for when an employee is sick. The quantum is as per the Shop & Establishment Act in different states. These leaves can be carried forward if there is a balance, with the logic that a person may face severe illness requiring medication and leave during that period, recommended to be carried forward up to 45 days, otherwise, they lapse. This accumulation also reduces absenteeism due to minor sickness. If a person is sick for more than three days, a medical certificate is usually required.
Maternity Leave: It is granted for 12 weeks - six weeks before delivery and six weeks after delivery. The lady has to submit a fitness certificate before resuming duty.
Leave Without Pay: If a person does not have any leave balance and the situation warrants leave, the company may grant leave as loss of pay, which may be adjusted against future leave or as a special case of special paid leave based on the person's contribution to the company, at management discretion.
Compensatory Off: These leaves are granted if a person works during holidays, normally compensated as leave to be taken or as an encashable option.
Some small organizations follow different rules, as they do not provide casual or privilege leaves, but just provide 28 Earned Leaves (ELs) and 3 Restricted Leaves (RLs).
Regards,
Ram Chauhan