Streamlining Leave Policies in Gujarat and Maharashtra: Seeking Advice on Best Practices and Legal Guidelines

Streamlining Leave Policy in Gujarat and Maharashtra

I'm looking into streamlining my company's leave policy and request your advice on the following. I have two subsidiaries in the states of Gujarat and Maharashtra in India. I would appreciate it if you could share with me the general practice in the private sector in these two states on the following:

1) Annual leave days granted per annum to employees.
2) Policy on the carryover of unutilized leave days.
3) Policy on the encashment of unutilized leave days.

Also, please share your knowledge of what is stated in the legislation on the above.

Thank you so much.

Regards,
Kal

Relevant Provisions of the Factories Act 1948

1) Annual Leave Days Granted Per Annum to Employees
Answer: Whatever you earn in the calendar year can be availed in the subsequent year, subject to prior approval by 15 days, thrice in a year, and a minimum of 3 days in a single instance.

2) Policy on the Carryover of Unutilized Leave Days
Answer: Unutilized earned leave (EL) can be carried forward subject to a maximum of 30 days or as provided in certified standing orders.

3) Policy on Encashment of Unutilized Leave Days
Answer: No provision is made for encashment unless you leave the organization. However, depending on circumstances such as refusal to avail the EL or to reduce absence, some managements usually encash the balance on a financial or calendar basis.

Regards,
P K Sharma

Dear KAL,

It is very important that the company in each state should follow the rules and regulations laid down in their state Act which is in vogue. This shall avoid future complications from the Authorities of Government departments.

Regards, V. MURALI

Share details of the type of business and the state.

Leaves are covered under normative legislations: Factories Act or Shops & Establishment Act. Normative because they stipulate the method to calculate the minimum quantum of leave for employees. In the Factories Act, minimum leave is calculated with the following formula: 1 day of leave for every 20 days worked. Leaves under the Shops Act differ from state to state. It is essential to be aware of them so that your policy does not contravene the statutory requirements.