Developing a Leave Policy for India: Can We Use the US and NZ Model or Adapt Locally?

I am working with an MNC with its head office in the United States. We have a uniform leave policy for the US and New Zealand offices. I have been tasked with developing a Leave Policy for the India office located in Gurgaon, Haryana.

Leave Policy Development for India Office

Is it possible for us to apply the same policy for leaves as in the US and New Zealand, or do we need to develop a Leave Policy in accordance with Indian Rules/the Punjab & Haryana Shop and Establishments Act?

Regards,
Ajay

If your company is registered under the Punjab Shops & Establishment Act, then you have to follow the rules of the State Act.

As long as you are providing better provisions under any policy than that of the statute you are subject to, there is no issue.

It is advisable to follow the concerned State Shops & Establishment Act/Rules where your office is located regarding leaves and paid holidays. However, if your leave policy incorporates all statutory leaves/paid holidays provisions as prescribed under the concerned State Shops & Establishment Act/Rules where your office is located, then you must give in writing informing the concerned Government Labour authorities about it for hassle-free compliance.

Thanks,
Anil Sharma

Dear Mr. Anil,

Thank you for the advice. Could you also clarify if we have a total of 30 leaves in a year, do we need to categorize them as Earned Leave (EL), Casual Leave (CL), and Sick Leave, or can we simply state in our policy that there are 30 leaves in a year?

Thank you,

Ajay Sharma

If your state's Shops & Establishment Act specifies CL/SL/EL differently, you must follow accordingly. Otherwise, you can draft the policy as needed. Lastly, it is advisable to differentiate CL/SL/EL in the policy for smooth functioning.

If, as per the US leave policy, it is greater than the Indian leave policy, you can go ahead. If the US leave policy is less than Indian rules, then please maintain it as per Indian state rules.

Regards, Sukhpal

Under the Punjab Shops Act, "year" is defined as the financial year. Do we also follow the financial year for leave calculation?

Thank you!

If you are registered under the Punjab S&E Act, you have to follow the act's regulations, which specify using the financial year for all leave calculations.