Can MNCs Deduct Salary for National Holidays Like Gandhi Jayanthi? Let's Discuss!

Can an MNC under the Shops & Establishment Act (ITES - Back office of a Leading UK Bank in Telangana) deduct salary or leave in lieu of (forced) national holidays, including Gandhi Jayanthi falling on a working day?

Please let me know if you need further clarification or assistance.

No, they can't, but there are always loopholes. It'll take a long time to prove that the employer is wrong. I have seen firms giving additional salary for those who work on Independence Day, Republic Day, Election Day, and all other national holidays.

Dear Roopchand,

Please refer to Sections 3 and 5 of the Andhra Pradesh Factories and Industrial Establishments (National, Festival, and Other Holidays) Act, 1974. The employees who are required to work on a National or Festival holiday falling on a working day shall be paid double wages or provided with an alternative holiday. For this purpose, a notice must be served to the concerned employees and submitted to the Inspector at least 24 hours before such holiday.

Thank you.

Thanks for enlightening. The firm employing close to 5,000 workforces in a single location (the firm has multiple locations of operations) also follows the payment of double wages on such National Holidays—but only limited to approximately 20% (termed as 'critical work process') of the employees who are asked to work on these days. However, for other employees (close to 80% approximately), it is a forced holiday by deducting one day from their leave balance or deducting one day's total pay + DA + allowances including PF, etc., if the employee does not have leave balance. Are they exempted to do so under any local laws as an MNC? Of course, the cost-saving would be enormous considering the number of employees/workforces. Raising any questions is considered as behavioral issues and has the potential for the employee to be put under disciplinary action or losing the job.

Sections 3 and 5 of the Andhra Pradesh Factories and Industrial Establishments (National, Festival, and Other Holidays) Act, 1974 only talk about the payment of double wages for employees summoned to work on National Holidays. However, there is no mention of the deduction of employees' leave or salary in lieu of wages for the (forced) holiday for a section of employees within the firm.

Every employee who has completed 30 days of service within a 90-day period is eligible for a paid holiday on a national holiday. The question of double wages or the granting of a substituted day off will only arise if the employee is required to work on that day, with the choice to select either option. Therefore, deducting wages for the holiday granted on such a day is illegal. If concerned, report this to the Inspector under the Act in an appropriate manner.

On my querying, the management has this to say: The company already provides 8 Festival Holidays (as per the UK Bank Holiday List), and as such, these National Holidays cannot be paid unless the staff is summoned to work. However, in my tenure of 9+ years with the company, I observe that in the last three to five years, only these and other similar cost-cutting practices are followed. Earlier, National Holidays used to be paid holidays along with the regular UK Bank holidays. I wonder if the Inspectorate authorities are not aware of such practices followed in a large company employing a huge workforce.

I have worked in reputed Indian leading manufacturing companies in the past for 25 years in Mumbai and other locations. Never have I found such a blatant violation or insult to the Government of India/state government guidelines on observing National holidays in India.

Regards

Now, going by what is said above by the MNC 'corporate', I do not understand how they are safely paying double wages for the employees summoned to work on a National Holiday, while preferring not to pay or deduct leave or salary for the majority of employees. If the cap of 8 Festival Holidays, as per the argument, is observed, logically, they must not pay the double wages either. It appears evident that the company is hoodwinking or window-dressing their actions in the eyes of the local labor laws, incurring enormous costs at the expense of the employees' benefits. Probably, I must wait for my Salary Slip for October and take it up with the authorities.

In the event of default by the employer to pay wages for every holiday specified under the A.P.I.ENFH Act 1974, Section 8(1) of the same Act empowers the affected workman or the trade union in which he is a member, or an inspector under the Act, or any other authorized representative to file a claim under Section 15 of the Payment of Wages Act, 1936.

Thank you for the information, sir. I also understand that any substitute or 'alternate' day as in the Act comes into picture only when the employee had worked on that holiday (Gandhi Jayanthi), and that the choice of double wages or alternate holiday rests with the employee.

So it is clear that the establishment cannot claim that one of its declared (festival) holidays is an alternate day of holiday for Gandhi Jayanthi as it is being done here.

Your academic query, "Can an MNC under the Shops & Establishment Act (ITES - Back office of a Leading UK Bank in Telangana) deduct salary or leaves in lieu of (forced) national holidays including Gandhi Jayanti falling on a working day," has no relevance unless you provide a proper description of the problem. Specifically, you need to clarify whether the holiday occurs during a period of leave or if deductions are made for taking a single day off as a holiday on account of Gandhi Jayanti.

Regardless of the prefix or suffix of the holiday, if the holiday falls within an employee's leave period, Gandhi Jayanti would be considered a part of the leave, regardless of whether the leave is paid or unpaid.

Thank you.