Is There a Companies Act Rule on Leave Calculation for Holidays and Week Offs?

Can you please help us? I am associated with a mid-level Indian company. In our organization, if you are absent before and after a holiday or a week off (WO), the holiday or WO is counted as leave. We don't have any specific allocation of CL, PL. There are a total of 30 days allotted leaves that are encashable. My boss wants to know if there is a provision in the Companies Act that specifically states that. The exact lines from the act itself will be very helpful so that we can formulate a new set of leave rules. For your reference: We are a Real Estate company.

Regards,
Upasana Mazumdar HR

Relevance of Companies Act in Leave Policies

The Companies Act has no role in this case. As the company is a Real Estate Firm, the leave rules for employees in the services area shall be covered under the Shops & Commercial Establishment Act and the rules of the state to which the organization belongs. Respective legislation would be applicable for building workers (if any).

Organizational Leave Practices

However, the prevailing rule in your organization, "When an employee becomes absent before and after a holiday or a week off, the holiday or week off is also considered as leave," is just a practice of your organization and not supported by any specific labor legislation. You could add this to your standing orders. Normally, when a company issues an appointment order, it will refer to 'the terms and conditions mentioned in the company standing orders'.

Regards,

Agree, there is no provision in the Companies Act. The leave calculation should be as per the provision of the Shops and Establishment Act or the Factories Act. The reply above is satisfactory, and I do not think you need to seek a second opinion on that.

The Company Act has nothing on this front. You need to look instead at labor laws. What your company is doing is a standard practice. It's called the sandwich rule. There is no specific rule either in favor of or against this in the Factory Act or Shop and Establishment Act. If Standing Orders apply to you (see Industrial Employment Standing Orders Act), then check the provisions of the same as it has more detailed terms for leaves and other procedures to be followed by factories and offices with more than 50 employees.

Regards,
Upasana Mazumdar HR