Can Security Guards Combine Days Worked Across Units for Leave Benefits Under the Factories Act?

Eligibility for Leave Benefits Under the Factories Act

As per the Factories Act, under section 79, any person who has worked for 240 days is entitled to leave benefits.

In the case where there are two units, Unit A and Unit B, and both are separately registered with different occupiers, then according to the act, both of these units are considered as separate factories.

Now, an agency has been engaged to provide security services to both units (i.e., A & B). There are cases of overlapping duties, whereby a few security guards have performed duties in Unit A and also acted as relievers in Unit B. Individually, these guards have not completed 240 days in a single unit. However, when the duties from both units are combined, they have served for more than 240 days. For example:

- Security Agency: XYZ
- Engaged for both Unit A and Unit B

One Security Guard's Duty Details:

- In Unit A: 210 days
- In Unit B: 70 days

This means that individually, the guard has not completed 240 days in either unit to be eligible for leave benefits. But when the days from both units are totaled, the guard has worked for 280 days.

In the above scenario, will the security guard be eligible for leave benefits under the Factories Act in the following cases:

(a) Both units are separately registered with separate licenses and separate occupiers.

(b) Both units are separately registered with separate licenses and the same occupier.

Regards,
DG

Dear Saptarshi, First of all, the security has been outsourced, so you as the principal employer have no control over their holidays or leaves. They, as employees of that security company, have cleared the 240-day mark, making them eligible for leaves. Your contract with the agency would be on a manpower basis, giving you another reason to worry less. The agency would have to substitute a person for the individual taking a leave.

And lastly, the security is covered by the Guard Board and not by the Factories Act.

Regards, Ashutosh Thakre

Understanding the Applicability of the Guard Board Act and the Factories Act

First, the author is in Delhi, so I assume the two units are not in Maharashtra. The Guard Board Act is a state legislation that only applies to the state of Maharashtra. The definition of a worker in the Factories Act covers every person in the factory, excluding the occupier and factory manager. Therefore, the contract workers are covered under the definition of workers.

Second, the principal employer is liable for all non-compliance of the contractors. So, if the contractor does not provide paid leave, the principal employer is liable under both the Factories Act and the Payment of Wages Act. Therefore, he must monitor and ensure that proper paid leaves are granted.

Approaches to Leave Entitlement for Security Guards

There are two approaches here.

Going by the ethical approach and the spirit of the law, the security guards are entitled to paid leave. I think the wording of the act says any worker who has worked for more than 240 days, and it does not specify 240 days in the same factory. So, since both units are under the same company, the leaves would be required to be granted. The Supreme Court has declared that labor laws must be given a broad interpretation in favor of the labor.

Further, the actual employer is the same, so you need to ensure that his employees get the paid leave they are granted under the law.

Legal Approach to Leave Entitlement

The second approach is the legal approach. Here, how you interpret the various provisions of the act and their interplay drives what the court decides. So, if you are looking to avoid paying for leave, then speak to your lawyer and see if he is confident in being able to defend it in court. Of course, it all comes up if someone makes a complaint.

However, do remember that defending such a case has a cost. The cost in lawyer's fees probably makes the savings look shallow. So, if you are going by the second approach, it depends on how good a lawyer you have and how much of a risk appetite you have. I cannot predict which way the courts will take a call.

Regards,
DG

Saswata,

I like your reply. Why should people play around with the law to find out how to deny a guard leave by saying you have not worked 240 days in a single unit? Management should be broad-minded and welfare-oriented and grant leave in the spirit of the regulations/laws.

If double duty is on the same day, you are violating Section 60 of the Factories Act 1948. Otherwise, the practice is legally correct as far as annual leave eligibility is concerned but ethically wrong.

As per the Factories Act, an employee includes regular, casual, and contract workers. Therefore, they fall under the purview of the Factories Act.

You will be surprised at how petty lower and middle management can be about such things. Dave will try to save as much as he can at the cost of the workers, even where there is no material impact. In fact, managers take pride in showing such small savings as their contribution to the company's bottom line. I have pointed out similar issues concerning paying overtime rates as well. In most manufacturing units, labor costs are not more than 10% of the manufacturing cost, and overtime will not exceed 20% of that. The net effect of both together would, therefore, be 0.20%. There are very few units operating at margins that would be affected by a 0.2% increase in costs. Yet, companies continue to pay overtime at double the basic plus DA when the law clearly states it should be double the gross wages. So, yes, most management are unethical in their approach.

I would like to thank everyone for sharing your views. However, I differ with the conclusion that management is not interested in paying. We are a public sector undertaking in West Bengal, and as I understand, the intention is not to avoid paying the dues of contract workers, but rather to ensure that only legitimate and legally viable dues are paid.

Guidance Required on Payment Viability

The guidance I require is on whether the payment would be viable as per the Factories Act, as there are two different Form 15 under two different Occupiers. Something that seems practical administratively might not be viable legally. At the end of the day, any payment made is subject to audit, and any such dispute needs to be justified properly. In our case, being a PSU, things will be audited by the CAG.

Hope things are clear.

Thanks.

Regards,
DG

If both factories belong to your company and the guard was working for different factories of your company, what grounds do you have to allow his leave to be denied? Other than some technical hair-splitting, of course.

Even if the second factory is not yours, but you know the guard worked there, you are still obliged to ensure he gets his legal dues, which include paid leave as per the law.