How Can I Revamp Our Leave Policy to Better Meet Employee Needs?

Dear Seniors,

I am working with a Pvt Ltd IT-based company, having 50+ employees. In my company, there is no formatted policy for leave and absenteeism. In our offer letters and appointment letters, it is mentioned that employees are allowed to take one day of leave per month, which will be paid. Employees want me to change this.

Request for Leave Policy Suggestions

Can you please suggest the exact leave format or policy I should introduce? I am not sure about how many leaves a person can take, or how many sick leaves and casual leaves an employee is entitled to take. Kindly guide me on the same.

Looking forward to your valuable reply.

Thanking you & regards,
Manjiri

Dear Manjiri,

Look into the Shop and Establishment Act that is applicable to your company. In my opinion, it should be the Bombay Shops and Establishment Act. You will have a minimum number of days of statutory leave mentioned in that. You cannot give anything lower than what is mentioned in the applicable Shop and Establishment Act, but you are free to give anything that exceeds the mentioned number of days.

Regards

As it's a small company, you and your management can decide on the number of leaves to be given in total. It's okay if you do not bifurcate the leaves into Sick and Casual. You can allot 1.75 leaves per month, i.e., 21 leaves in a year. Employees can take leaves once they have enough leave balance in their leave account. You can speak to management and change from 1.75 to 2 leaves per month, depending upon their discretion. Lemme know if anything else is required.

Dear Sir,

The company's strength is 50 to 55 employees. Please guide me based on that.

Regards,

Compliance with the Bombay Shops & Commercial Establishments Act

The extracts from the Bombay Shops & Commercial Establishments Act are attached. You need to modify your leave rules in accordance with this Act. If there are any discrepancies, your company may receive notices from the appropriate officials under this Act.

Regards

Please check whether your unit is covered under which act. All the acts concerning leave policies are similar. However, you are required to provide 15 days of P.L. subject to completing 240 working days in a calendar year and pro-rated if the employee joins in the middle, subject to completing 2/3rd of their attendance. The procedures for computing leave are explained in the Act.

In addition to this, your company may grant CL and SL based on calendar years for all employees. Typically, established organizations permit 7 to 8 casual leave days and 12 sick leave days. This is a policy matter that can be decided by framing standard employment rules for your company, getting them approved by the management, and following them.

Regards,
Adoni Suguresh Sr. Executive (Personnel, Administration & Industrial Relations) (Retired) Labour Laws Consultant