How Do Privilege Leave Rules Apply to Executives in Indian Factories? Seeking Clarity on Accrual and Usage

Clarification on Privilege Leave (PL) Under the Factories Act 1948

I need to clarify something about Privilege Leave (PL) as per the Factories Act 1948. I understand that the act states:

(1) Every worker who has worked for a period of 240 days or more in a factory during a calendar year shall be allowed during the subsequent calendar year, leave with wages for a number of days calculated at the rate of— (i) if an adult, one day for every twenty days of work performed by him during the previous calendar year.

I am asking specifically for a pharmaceutical company in India, where there are both factories covered under the Factories Act, which have both workers (very few) and executives (large), and offices covered under the Shops and Establishment Act. Are there any hard and fast rules about when the leave will accrue to the employee and when he can enjoy it? For example, if an employee (not a worker strictly as per the Factories Act, but staff, executives, managers, etc.) works from Jan 15 to March 15, and for the period worked, he is eligible for the proportionate amount of leave for that quarter, can the employee avail (enjoy) the proportionate PL accrued in April or any time during the current year, or does the employee only avail (enjoy) the earned leave after the completion of the current calendar year 2015? If he is allowed to avail it in April itself, does that pose any problem under any law?

My question arises because we now have technology and ERP systems in place that allow leave accrual, balance, and other data to be auto-calculated and credited based on system-defined rules, unlike the years before technology when manual register-based systems made it impossible. I have seen companies that allow credit PL on a quarterly or 6-monthly system as they earn it, and the employee is allowed to avail it as it gets credited into his leave account. Is there anything wrong with that practice? What is the norm followed here by others? Please enlighten with your inputs.

Thanks,

Mona Dutta

Understanding Privilege Leave or Earned Leave

In the first place, Privilege Leave or Earned Leave, as the very name suggests, is a privilege to avail of leave by an employee or workman in the succeeding year, earned on the basis of a certain number of services rendered by him in the current year. So, strictly as per the law applicable to the industrial establishment, whether a factory or another specific establishment covered by any other establishment-oriented law, the question of availing of Earned or Privilege Leave will arise only after the completion of the stipulated length of service mentioned therein. If the employer, on the contrary, allows his employees to avail of this leave on a quarterly basis, well, this is more beneficial to the employees and as such does not pose any problem.

Management Perspective on Leave Policies

Secondly, your question, I suppose, arises from the point of view of the unity of management. Any manufacturing industry, irrespective of its core activity, can undertake other activities like distribution, marketing, and sales. It is not necessary that all these activities should emanate from the same premises. When they are done from different premises/places, the appropriate establishment-oriented laws will be applicable to them. So the scale, eligibility, entitlement, and accumulation limit of the privilege/earned leave will be according to the particular law or the classification of employees as the case may be.

Regards,