Employee Leave Eligibility: What Happens If They Miss 240 Days in a Year?

Suppose an employee has not worked for 240 days out of 365 days, including Sundays, holidays, and weekly offs.

1. Is he eligible for all types of leave and statutory benefits?
2. Will his leave be reversed?
3. How can we calculate PL/EL (as per the Factory Act 1948)?

Dear friend,

Please add the following criteria: Is the 240 days continuous leave without pay or with pay? Is it medical leave or absence from the workplace? Also, is any inquiry conducted regarding conduct or other related issues that will help to clarify the situation comprehensively.

Thank you.

Dear friend,

The eligibility of 240 days has been amended to 180 days from November 2015 onwards. Please see the amended Factory Act.

Statutorily, only leave with wages is mentioned under the Act. There is no other type of leave unless you have extended it.

Please read the chapter on Leave with wages under the Act, which will explain your queries. Since leave is credited later, there is no question of its withdrawal. If an employee joins after 1st January and works for 2/3 days for the remainder of the year, they will be entitled to 1 day of leave for every day worked. This is because 240/365 = 2/3.

Dear Murthy, can you please share the amendment? I understand that there was a proposal to amend the Act to make workers who have worked for 90 days eligible for leave with wages.

Supposing that there has been no such amendment, I would like to clarify that an employee who has not worked for 240 days in the preceding year will not be eligible for any annual leave with wages. Since this is the only leave admissible as per the Factories Act, any leave that you grant to employees will be in addition to this leave, and that will continue to be available to the employee even if he has not worked for 240 days.

Now, I would also like to say that 240 days are inclusive of all weekly off days, paid leave days, maternity leave (in the case of women employees) days, lay-off days, and holidays. An employee who is eligible to get annual leave with wages will get one day for every 20 days physically present in the preceding year. For this, only the actual days physically present will be taken into account. For example, an employee has worked for 153 days in 2016 (12 months from January to December). He has taken some 20 days of PL. He was on leave due to employment injury for 5 days. There were 52 paid weekly off days and 10 holidays during 2016. Then he will be eligible to leave with wages in 2017 since the total days (paid days) he has worked is 240 days. He is said to have continuous service as per all labor laws also. However, his leave for the year 2017 will be restricted to one day for every 20 days physically present or 7 days only.

As already mentioned, this is the way in which continuous service is determined under the Payment of Gratuity Act or the Industrial Disputes Act. Therefore, if the total of days physically present, holidays, weekly off days, etc., falls short of 240 days, he is said to have interrupted service, and that year will not be counted for gratuity and retrenchment compensations.

There is no option for granting leave in advance. Therefore, if leave has already been granted, it cannot be recovered from the employee.

There is only one kind of leave under the Factories Act, and any leave that you grant will be additional only.

A serious concern

If the Factories Act is amended with a provision that leave is to be granted to workers who have worked for 90 days (or 180 days), most of the workers, including casual laborers, will get leave because there are at least 52 weekly off days, 10 holidays (in Kerala it is not less than 13 holidays as per the Kerala Industrial Establishments National and Festival Holidays Act), and obviously a few paid leaves!!

Regards, Madhu.T.K

Dear Mr. Madhu,

Madhya Pradesh Govt. has amended the act in November 2015. Please find the amended notification attached herewith.

Dear Sir,

If any worker or employee left or resigned within a year, how do we calculate their leave with pay in this case?

Sir,

Please inform me if a worker/employee who joined on March 1, 2016, and resigned on May 31, 2016, after working a total of 76 days is eligible for leave with pay or not.

Eligibility for Leave Based on Days Worked

In respect of any employee joining during the year, the minimum days required to become eligible for leave, i.e., 240 or 180, as the case may be, shall be reduced proportionately. Therefore, if the date of joining is 1st March 2016, he should have worked for 200 days or 150 days (in MP) to be eligible for leave with wages. If he has left the service in the same year, he should leave without taking any leave pay. If HR is to calculate leaves for each person like this, there will be no end to it.

Leave Under the Factories Act

Leave under the Factories Act is admissible only in the second year (calendar year) of service. If he is not in service, why should we give leave?

Regards, Madhu T K

Dear Mr. Vamshi,

This rule is applicable to the MP Govt. Please see it in the attached PDF format above the EL Calculation clause.

Murty

Sir,

Please inform me if a worker/employee joined on 1st March 2017 and left/resigned on 31st May 2017 after working a total of 76 days during their service. Kindly advise if they are eligible for leave with wages or not.