How Do Small Companies Balance Leave Policies with Labor Laws? Seeking Advice!

Hi, I have just joined a new small-scale company with an Employee Strength of 90. I need help in formulating a Leave Policy. Although I read a few leave policies of MNCs, according to them, they have EL=12; CL=12 & 10 Holidays in a year. However, according to Labour Laws, an employee is entitled to at least 15 Days EL in a year (i.e., 1 EL after every 20 Days of working excluding Sundays).

My question is, what would be the suitable number of leaves for employees and how can an MNC not follow leave rules as per Labour Laws?

Thanks & Regards,
Trapti Sharma

The following are the mandatory leaves:

1. Republic Day
2. May Day
3. Independence Day
4. Gandhi Jayanti
+ 6 important festival days of your state.

Apart from the above, we have the following:

1. EL - Earned Leave - 15 days
2. SL - Sick leave - 6 days
3. WL - Wedding leave - 3 days
4. ML - Maternity leave - As per act
5. PL - Paternity leave - 3 days
6. AL - Adoption leave - 2 weeks
7. BL - Bereavement leave - 3 days
8. SPL - Special day leave - 1 day

Also, you can check your government leave calendar.

Trust the above will help you.

Regards,
Dasa

Hi Trapti,

I can say it depends on company policies. Some companies even have 20 EL's. For the leave structure, I am attaching a Word document. I hope it will help you.

Regards,
Nagesh
Hyderabad

Dear Trapti,

We usually have CL, which stands for casual leave, allowing one day off per month, totaling to 12 days per year. Employees can avail 3 CLs at a time. Employees who are not under ESI are eligible for SL, which stands for Sick Leave, providing 12 days per year. Additionally, employees who have completed one year of service (240 days) are entitled to 15 earned leaves (EL) per year. EL can only be availed three times in a year.

Thank you.

Hi Trapti,

Whatever you are discussing about your MNC might be covered under the Shop and Establishment Act because there is a difference between the Factory Act and the Shop and Establishment Act from a leave point of view. As per the Shop and Establishment Act, the number of leaves varies from state to state.

As per the Factories Act:
1. EL - 1 for every 20 days working
2. CL - 7 or as per certified standing orders
3. Sick/Medical - as per certified standing orders, generally 10 for those not covered under ESI
4. Holidays - as per certified standing orders, varies from 7 to 10

If you are covered under the Shop and Establishment Act, it depends upon the state. For example, in Uttar Pradesh:
1. Annual Leave
2. CL - 10
3. Medical - 15

In Delhi:
1. Annual - 15
2. CL and Medical - 12

So, it varies from state to state. The quantum of leave cannot be reduced; it can only be increased from mandatory. For more details, you can refer to the book "Leave and Holidays" by H.L. Kumar.

Thank you,
J.S. Malik

Strictly speaking, if you come under the Factories' Act, you will have to give PL at the rate prescribed, i.e. 1 Earned Leave for every 20 days worked.

If you come under the Shops & Establishments Act, then you will have to abide by the rules of the S&E Act of your State, as far as rates of Earned Leave, Sick Leave, and Casual Leave are concerned. As far as maternity leave is concerned, you have to abide by the Maternity Benefits Act. You also have to abide by the holidays prescribed by the Central Government, i.e., Independence Day, etc. Remember, these are the minimum number of leaves prescribed by law.

Over and above these, you are welcome to give additional leave and also prescribe how the leave should be availed. You are also welcome to add on additional leave like Wedding Leave, Paternity Leave, etc., and determine how such leave is to be availed. I hope I have cleared the matter.

Jeroo

Hi,
I have just joined a new small scale company Employee Strength: 110.
But According to Labour Laws An employee is entitled for at least 15 Days EL in a year.(i.e. 1 EL after every 20 Days of working excluding Sundays).
It's almost 3 months completed in this Pvt. Ltd. Company, which have Factories' Act. My MD of company is deducting Per day Full earning if i am absent single Day on my work. Does It really justify with me?
My question is what would be the suitable no. of all kinds of leaves for employees leave rules as per Labour Laws.

Please provide me in this format.
1. EL - Earned Leave - __ days
2. SL - Sick leave -__ days
3. WL - Wedding leave - __ days
4. ML - Maternity leave - As per act
5. PL - Paternity leave - __ days
6. AL - Adoption leave - __ weeks
7. BL – Be averment leave - __ days
8. SPL - Special day leave - __ days
Reply Awaited.....


Thanks & Regards
Harsh
SM
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Dear Harsh,

If you are only considering earned leave, then your MD is doing the right thing because you are entitled to 15 EL days per year, which you can avail after completing 240 working days without including rest days. Therefore, after working for one year initially, you are eligible for 15 days of leave, not after 3 months of joining. You must work for 240 days.

For any queries, you can write.