Earned Leaves/Privilege Leaves
Employees/Consultants are entitled to 21 days of privilege leave (at the rate of 1.75 leave for the period of one month working, which includes CL and SL but not Leave Without Pay). These are the leaves that are earned in the previous year and enjoyed in the following years. They are also known as privilege leave and can be carried forward for a quantum of up to three years, varying from state to state as per the Shop & Establishment Act. These are encashable on the basic salary to the employee. The conditions for taking these leaves usually differ from company to company but normally require at least 15 days' advance notice. This can be clubbed with sick leave if sick leave is not balanced with the employee.
Provisions Under the Shops and Establishment Acts
Provisions similar to those of the Factories Act, 1948, have been adopted under the Shops and Establishment Acts of various states in India. For example, the Delhi Shops and Establishments Act, 1954, mandates that every person employed in an establishment is entitled to:
i. Privilege leave for a period of not less than 15 days, after every twelve months of continuous employment; and
ii. Casual or sick leave for a total period of not less than 12 days every year.
An employee becomes entitled to a minimum of 5 days of privilege leave for every four months of continuous employment and a minimum of 1 day of casual leave upon completion of every month at work.
Example: Factories (Maharashtra) Amendment Act
The Factories (Maharashtra) Amendment Act (“Amendment Act”) has come into force on 2nd December 2015 after receiving the assent of the President. The Amendment Act shall specifically be applicable to the State of Maharashtra. The amended provisions shall be in consonance with the Factories Act, 1948 (“Principal Act”) and shall only replace the relevant provisions as and to the extent mentioned in the Amendment Act. The continuous working days for a workman have been reduced from 240 days to 90 days for availing annual leave with wages.