Balancing Employee Needs and Productivity: How to Handle Saturday Off Requests in a Factory Setting?

I work for a Japanese company as an HR Manager located in Greater Noida. The company is involved in manufacturing and supplying automobile parts to car makers. Since we are solely engaged in trading, dispatches are planned on weekdays only. We are also registered under the Factories Act as a manufacturing unit. As we operate 6 days a week and all employees commute from afar, they have started requesting Saturdays off. The management is willing to grant two Saturdays off but only as unpaid leave. Our office hours are from 9 to 5:30, and we cannot extend them due to the long commute for employees. Could you please suggest some effective options on how we can maintain productivity if Saturdays are granted off?

Rotational Saturday Offs

I proposed to the management the idea of rotational Saturday offs, considering we have backups in each department, but they are hesitant to accept this.

Working Hours Clarification

Secondly, are the working hours of 8.5 inclusive of the lunch break? There seems to be a conflict on this point on various sites. Kindly clarify this and provide possible solutions to address this issue.

Regards,
Yamini

Changing Working Hours: Key Considerations

Changing the hours of work involves a number of complications. If you increase the working hours per day, you can reduce the pressure of reducing the number of working days. However, an abnormal increase in working hours is not permitted by law and may lead to serious health issues, which in turn may cause absenteeism and subsequent loss of man-hours.

The law permits you to reasonably employ a workman for 8 hours a day, excluding intervals of rest. The working hours, including intervals of rest (referred to as "spread over"), can be 10 hours and 30 minutes per day. Simultaneously, on any particular day, you can permit someone to work for 9 hours without paying overtime for the additional one hour worked. Overtime is payable only if the individual has worked for more than 48 hours in a week. This means that if you have 9 hours per day and only 5 working days, the normal working hours in a week will be 45 hours, and there is no question of paying overtime wages since nobody should work for more than 48 hours.

Impact of a 5-Day Working Week

Having a 5-day working week with one day as a loss of pay leave is not considered a good HR practice. Loss of pay is marked when the establishment is open, but the worker does not turn up for work. This will impact pension, gratuity, and other terminal benefits. Additionally, someone who has put in additional hours or overtime may fail to receive it simply because they are absent for one day. Conversely, if the normal working hours are 45 hours per week, anyone exceeding 45 hours will benefit from overtime payment. In cases where the company works only 45 hours a week, working 48 hours is not necessary, and in such scenarios, 45 hours will be taken as the benchmark for deciding overtime (please refer to Philips India Ltd Vs Labour Court, Madras (1985 AIR 1034)).

Organizing Shifts and Employee Welfare

If you organize shifts like the 1st and 3rd weeks with 9 hours over 5 days and the 2nd and 4th weeks with 8 hours over 6 days, you will be losing 6 hours per month. This can be overlooked as an employee welfare scheme. However, if you cannot ignore this, please consider not opting for a 5-day week. It should never be at the expense of the employee.

Regards, Madhu.T.K

Increase work hours, pay overtime wages, and provide coverage for production.

Overtime and Working Hours Management

No, we cannot pay overtime wages permanently because there is a limit to the number of overtime hours, such as 50 hours per quarter (in some states, it is 75 hours per quarter as per their rules). Reducing the working days per week can be done by increasing the working hours per day, but each day should not have more than 9 hours. At the same time, the management is not ready to lose 3 hours per week; naturally, it will account for a significant loss of man-hours per annum.

Reducing Holidays and Leaves

Reducing the number of holidays or leaves per annum, subject to the statutory holidays as per your state's Industrial Establishment (National and Festival Holidays) Act and the Factories Act/Shops Act, as the case may be, is another option. This is possible only if you have more holidays and leaves than what are prescribed under the above Acts.

Regards, Madhu.T.K

There does not seem to be any viable option other than what Mr. Madhu suggested. The establishment will be losing three hours per worker per week, resulting in a significant man-hour loss and a subsequent decrease in annual production turnover. Additionally, the establishment must pay wages for Saturdays as it is the establishment that is granting the day off.

Please investigate whether employees residing far away can work from home on Saturdays and, if so, determine how to monitor and supervise them.

Regards, B. Saikumar
HR & Labour Law Advisor
Navi Mumbai

When you consider the cost of running a full day, i.e., Saturday, such as electricity charges, wages for daily-rated workers, etc., the loss will be minimal. Therefore, you have to present the matter from this angle also. Obviously, those who are in sales may not get the benefit of a 5-day week, and this happens to be the same for all establishments that operate for 5 days.

Madhu.T.K

Understanding Japanese Management's Perspective on Indian Labor Laws

Probably your Japanese bosses do not understand Indian law requirements. What they are basically saying is that they will give 2 days a week off, but you need to lower the pay proportionately. That is a bad idea, first because it's complicated and likely to cause a dispute.

Considerations for Implementing Changes

If you have to do it at all, do it during your next increment cycle. Lower increment is allowed, lowering the actual wage rate is not. You are a trading company. Dispatch is not on Saturday, so only paperwork probably happens.

Alternative Solutions

If you are willing to work an extra hour every day (allowed under the law), then the differential productivity loss is minimal. If employees are not willing to work the extra hour also, then don't change. They knew the job timing and Saturday working when they joined.