Is Our Holiday and Salary Deduction Policy Legally Compliant? Seeking Your Insights

Dear Professional Colleagues,

Policy on Declared Holidays and Salary Computation

We have a policy where if any employee works less than 20 days in any particular month, he/she will lose the benefit of declared holidays. This means all Sundays and paid holidays under the National and Festival Holidays Act will not be considered for salary computation, and they will lose salary/wages for all Sundays and holidays for that particular month.

Legal Compliance of the Policy

Now my question is, what is the legal sanctity for enforcing such a policy, and whether such a policy is legally compliant or a violation of the law?

Proportionate Holidays for Monthly Rated Employees

Secondly, can we give proportionate holidays against physical working in a month for monthly rated employees on the rolls of the company? For example, if somebody has worked for 17 days in a month, they get only three Sundays in that month.

I request your validated views on this and how far such policies are supported in the eye of Industrial Law and rules.

Dear friend,

It would have been better had you mentioned the type or classification of your establishment. However, let me proceed to answer your queries based on the assumption that it is an "industrial establishment" as defined under Section 2(4) of the Karnataka Industrial Establishments (National & Festival Holidays) Act, 1963. Even otherwise, the basic principles underlying the grant of National and Festival holidays and the weekly holiday in respect of employees employed in industrial establishments situated elsewhere are one and the same.

National and Festival Holidays

Section 3(1) of the KNIE(N&FH) Act, 1963 mandates that the employees of every industrial establishment shall be allowed 3 national holidays on January 26, August 15, and October 2, and 5 other festival holidays in every calendar year. In addition, Section 3A provides for paid holidays on the polling day for the House of People or to the State Legislative Assembly notified under the People's Representation Act.

Paid Holidays and Service Requirement

Section 5(1) of the Act states that the above holidays are paid holidays. However, the grant of such holidays with wages is controlled with reference to a certain minimum number of service in the establishment by the proviso to Section 5(2) of the Act only in respect of the 5 festival holidays. In other words, to avail of a paid holiday on the occasion of any approved festival, an employee should have been in the service of the employer for a total period of 30 days within a continuous period of 90 days which includes a weekly holiday or any other holiday or any authorized leave.

Weekly Holiday Grant

Regarding your query on the grant of a weekly holiday, every 7th day following 6 working days should be a holiday is the general principle. It may vary according to the nature of the activity of the establishment. But the term "working day" would include days spent on authorized leave by the employee apart from the actual days he worked. Therefore, if you take only the physical working days actually worked by the employee in a month for the purpose of his holidays, I am afraid your act is more in violation than compliance.

No policy of an establishment can run counter to the provisions of any law. Hence, I would request you to review your policy by juxtaposing its principles with the provisions of the Labour Laws applicable to your establishment in this regard.