Can a Company Legally Remove Sick Leave if ESI Benefits Apply? Seeking Advice

Hello everyone, one of my friends is working as an HR in a manufacturing company. His company wants to exclude sick leaves from the leave policy, and then there will be no sick leave allotted to any employee despite the fact that the company comes under ESI benefits. Can anyone tell me if the company can remove sick leaves from the leave policy? What is the law regarding sick leaves if ESI started from 01.10.2014?

Under the ESI Act, if an insured person requires medical treatment, attendance, and needs to abstain from work on medical grounds, sickness benefit is paid for the period of abstention duly certified by the Authorized Medical Officer for a period not exceeding 91 days in two consecutive benefit periods (e.g., one year) at 60% of their wages, subject to the payment of contributions for not less than 78 days in the corresponding contribution periods.

Thank you for your valuable response. I would like to inquire whether the company has the authority to remove sick leave from its policy effective from 1.10.2014?

When you are covered under the ESI, what is the need for the company's different sick leave policy? Yes, they can change the policy. Please let me know if you need any further assistance.

Regards

Can Companies Permanently Remove Sick Leaves from Their Policy?

In general, companies have the flexibility to define their own leave policies according to their specific needs and requirements. As such, it is possible for a company to decide to remove sick leave as part of their policy permanently. However, it is essential for companies to consider the potential impact this decision may have on their employees and overall organizational well-being. Communication and transparency are key when implementing changes to leave policies to ensure understanding and alignment across the organization.

Regards.

Sick Leave and the Factory Act

Under the Factory Act, there is no concept of sick leave. The company is required to give 1 day of paid leave for every 20 days worked in the previous year. To that extent, the company can do away with sick leave.

All employees who are under ESIC get their leave salary paid by ESIC, and the company has nothing to do with that, except allow the person to be absent from work.

Checking Standing Orders

Please check whether there is any division of leave in your standing orders (certified or model). If it's there, you cannot remove sick leave from it without amending the standing orders, which requires the approval of the factory inspector/labor commissioner.

Considerations for Non-ESIC Employees

Another point to consider is that removing sick leave for those who are not in ESIC will amount to a change in terms of employment. Such changes need to be approved by the employees, workers, or union. You need to give notice of it and get the same approved, or it will become an industrial dispute.

Clarification on Query Submission

You are asking for suggestions on behalf of one of your friends. You mention that your friend works in HR, so who would know better than you since he or she faces the issues, maybe even from the management side. Questioning why you are asking instead of your friend can lead to confusion for the experts trying to give their opinions. It's essential to present all facts clearly, provide complete information, and not hide your identity. This practice is unhealthy. Advise your friend to share any problems directly in this forum along with their queries.

Nevertheless, since you raised the query, our esteemed contributing member Mr. Saswata Banerjee has addressed your question well. Modifying or revising a company's leave policy is not easy as it involves various channels. Providing benefits is simple, but withdrawing them is challenging, especially if the workers are part of a Registered Trade Union affiliated with AITUC or CITU. All aspects must be considered before experts can give their opinions. As educated professionals in HR and Personnel, it's advisable to read magazines, labor laws, comprehend them, and develop your career. Simply stating a problem and expecting an immediate response is not a good practice. Thank you, Mr. Banerjee.

Mr. S. Banerjee, please correct me if I am mistaken. I frequently read your comments, Mr. Korgaonkar's, Mr. Varghese Mathew's, and many other contributing members', with interest whenever I have time. Without hesitation, as your comments and those of the aforementioned individuals are valuable.

Thanks and Regards,

Adoni Suguresh
Sr. Executive (Pers, Admin & Ind. Rels) Rtd
Labour Laws Consultant

Dear Adoni,

Your contention is correct. Many times, people put in multiple identities, ask on behalf of others, or give partial information. Some do this because they don't realize how varied the answers can be for small missing information or how a small fact can change the circumstances. Unfortunately, some think it's our duty to answer their questions even when they haven't bothered to read previous threads on the forum.

I am glad to hear that you find our posts worthy of repeating. Most of us active members here post to share our knowledge, and you are free to use, repost, share, and, where necessary, correct any errors we may have made.