How Can We Create a Fair Leave Policy for Both Permanent and Daily Wage Workers in Manufacturing?

Dear All,

Kindly guide me on how to implement the leave policy in our company - a Manufacturing concern. We have two types of employees: 1) Permanent and 2) Daily Wages. Currently, our company provides one day of casual leave for permanent employees. I am looking to establish a leave policy for our company that aligns with industry standards. Your suggestions would be greatly appreciated.

Regards,
Sowmyanarayanan.K

Hi Sowmya,

When framing the leave policy, it is advisable to understand the leave rules. Based on the leave rules, it is advisable to prepare the minimum types of leaves such as Earned Leave (EL), Casual Leave (CL), and Sick Leave (SL). Beyond that, with management consent, try to create a more comprehensive policy that is feasible for both management and employees.

Leave Policy under the Factories Act

All the manufacturing units will come under the Factories Act. As per the Factories Act, employees are eligible for Earned Leave (EL) at a rate of 1 day for every 20 actual working days, with no mention of Casual Leave (CL) or Sick Leave (SL).

Maternity Benefits and ESI Coverage

If your organization is covered under the Employees' State Insurance (ESI) and all female employees are included in ESI coverage, then the Maternity Benefit Act may not be applicable as they could receive maternity benefits from ESIC. However, if some female employees are not covered under ESI, they would be eligible for maternity benefits/leave.

Casual Leave Entitlement and Policy Development

According to your communication, all permanent employees are entitled to casual leave, presumably one day per month. As per the Factories Act, one day of EL should be granted for every 20 actual working days to all employees, including regular, contract, and casual workers. It would be advisable to develop a leave policy that distinguishes between EL, CL, etc. Conduct a survey on leave regulations/policies in similar and neighboring industries, consult with management on compliance with the Factories Act, analyze data from the survey, assess affordability, formulate leave policies/rules, and implement them.

Prompt action is necessary before directives are received from the statutory authority under the Factories Act.

Thanks,
Kamesh