Can Employers Grant Leave Beyond Legal Limits? Seeking HR and Legal Insights

Leave Sanction Beyond Eligibility

Can an employer sanction "leave" to an employee beyond the eligibility provided as per the Factories Act, Shops & Estt Act, Standing Orders, Service Rules, and Appointment order? In other words, if an employee requests leave after exhausting all his eligible leave, is the employer expected to only authorize his absence? Even the ESI Medical Officer in the certificate mentions that the insured person needs abstention on medical grounds. I request seniors/veterans in the HR and Legal profession to clarify this important issue in the interest of all concerned, with case law if any.

Thanks and Regards,

N. Nataraajhan, Sakthi Management Services [Phone Number Removed For Privacy Reasons]; [Email Removed For Privacy Reasons]

Clarification on Leave Sanction Beyond Eligibility

I once again request seniors/veterans in the HR/legal profession to clarify whether an employer can sanction "leave" to an employee after the employee has availed all his eligible leave. In my previous employment, I would mark "AA" (Authorized Absence) in case the employee had exhausted all his leave and his absence was genuine and necessary. If there was no request or if the request was refused, the employee would be marked "UA" (Unauthorized Absence). In the case of absence on medical grounds (ESI), the employee would be marked "MA" (Medical Absence).

By utilizing this system, we were able to restrict unauthorized absences. If unauthorized absences exceeded a certain limit, appropriate disciplinary action could be taken. In cases where absences on medical grounds continued without improvement, we even had the option to terminate the employee's services on grounds of "continued ill-health" after providing reasonable opportunities.

Regards,
N. Nataraajhan
Sakthi Management Services
HP: [Phone Number Removed For Privacy Reasons]
Email: [Email Removed For Privacy Reasons]

Sanction of Leave Beyond Prescribed Limits

Sanctioning leave beyond the prescribed maximum limit, as per the contract of service or applicable law, is at the employer's discretion. Typically, this discretion is exercised based on various factors such as the employee's performance and conduct, the importance of the position, the possibility of making alternative arrangements, and the urgency and necessity of the leave.

Leave on Medical Grounds

However, when it comes to leave required on genuine medical grounds, the possibility of discretion seems limited. The reasons are:
1. Refusing leave despite the employee's genuine illness, supported by medical opinion, would be inhumane.
2. Insisting otherwise could make the employer liable for compensation if any mishap occurs due to the employee's illness.
3. If there is no adjustment with future leave, as the leave sanctioned would be on loss of pay, the employer has no monetary commitment.
4. As mentioned in your later post, Mr. Nataraajhan, frequent and unabated leave of absence could justify termination due to continued ill-health.

Regards,

Dear Mr. Umakanthan, Thank you very much for your prompt and detailed response. I have never implied that the employee's request for absence on medical grounds or for genuine reasons should be denied. My main query pertains to whether the employer has the authority to approve "leave" that is not specified by law or in the employment terms. My uncertainty arises because, although Section 79 of the Factories Act 1948 explicitly states that annual leave should be provided with wages, Clause 8 of the TN Model Standing Orders does not clearly mention that 10 days of casual leave should be with wages.

Additionally, Section 2 (oo) (c) of the Industrial Disputes Act 1947 addresses termination due to prolonged ill-health. In a previous role, we terminated some employees due to their ongoing health issues, supported by ESI certificates demonstrating their frequent absences over several years. We ensured to caution them about maintaining good health and offered ample opportunities for improvement before their eventual termination.

My primary concern is whether the employer can grant "leave" to employees when not explicitly authorized by law or the employment terms.

Best regards,

N. Nataraajhan Regards

Your rejoinder is well-taken, Mr. Nataraajhan. One of the basics of Labour Jurisprudence is that no contract of employment or Labour Law confers any right on the employer in respect of his contractual or legal obligations to his employees. Therefore, the term "right" is a misnomer, I think, insofar as the employer's role in complying with the beneficial conditions of service either as per the contract of employment or the provisions of the Statute applicable. On the contrary, it is his "responsibility" or "obligation" or "duty" both statutorily and contractually.

Leave of Absence

Coming directly to your question, in employment parlance, "leave of absence" generally means the absence from work or from the place of work with wages as well as with the prior permission or sanction of the employer. However, there may be obvious circumstances like exhaustion of the maximum limits of all kinds of leave, and the employee may still be in dire necessity of leave. When such absence is regularized before or after its avail, it is called Leave on Loss of Pay or Leave Without Wages for the sake of continuity of service under the same employer. So it is just a concession granted by the employer subject to his discretion over and above his statutory obligation in complying with the leave provisions of the contract of employment or any Law applicable.

Regards

"Leave cannot be less than what is specified. But where is the ban on giving more? My question again is whether the employer has the right to sanction "leave" to the employees, which he has not been empowered to do either as per law or according to the service conditions.

Understanding Leave Entitlements

My way of reading leave entitlements laid down by Acts is that they are compulsory to be given, but there is no reason or objection if the employer is ready to give more than the number of days of Casual Leave (C/L) specified or Paid Leave.

State Variations in Leave Policy

Leave policy varies from state to state. The negative connotation that one cannot give more than the laid-down leaves is not there in my opinion.

This link can be read:

Ratna Sugar Mill Mazdoor Union vs. Ratna Sugar Mills Company, Ltd. ... on 9 November 1965

Extract: I find considerable force in the submissions made by Sri S. N. Kacker. It is an admitted fact that the mills used to grant its workmen more leave than is prescribed under the Factories Act and the Uttar Pradesh Shops and Commercial Establishments Act. As has already been stated above, the State Government by a notification dated 3 October 1958 framed some standing orders for sugar factories under Section 3 of the Act. Section 78 of the Factories Act is contained in Chapter VIII, which deals with annual leave with wages and reads thus:

(1) The provisions of this chapter shall not operate to the prejudice of any right to which a worker may be entitled under any other law or under the terms of any award, agreement, or contract of service:

Provided that when such award, agreement, or contract of service provides for longer annual leave with wages than provided in this chapter, the worker shall be entitled to only such longer annual leave.

The employer can, therefore, give more but not less than what is laid down in statutory orders."