Understanding Leave Policy Requirements: Is a Leave Policy Mandatory for Small Firms?

Hi Team,

I need help with the leave policy. I would like to know the specific Act and section which mandates a company to have a leave policy in place. Additionally, I am interested in understanding the requirement related to the number of employees needed for this policy to be mandatory.

For example, if I have a firm registered as a commercial establishment with 10 employees, am I legally bound to have a leave policy (with provisions for both paid and casual leaves) for my employees? Or can I simply implement a "No paid leaves" policy where any leave taken results in a deduction from the employee's salary?

Thank you for your assistance.

If you are a commercial establishment, you will be covered by the Shops and Establishment Act of your State, and you are bound to frame a leave policy as per the said Act even if you have 10 employees.

B. Saikumar
HR & Labour Law Advisor
Navi Mumbai