Is It Ethical for Companies to Scrap All Paid Leaves Due to COVID-19? How Should I Respond?

Dear Members,

My company has decided to scrap all paid leaves (including sick leave) for this financial year considering the COVID-19 effects and leaves already granted. I find this decision completely unethical, especially since the management has already implemented pay cuts for the months of March, April, and May.

I would appreciate your guidance on this matter. Should I try to convince the management that this decision would set a wrong example, or should I comply with the instructions given the impact on revenue?

Thank you for your assistance.

Management should not use this "double-edged sword". Broadly speaking, management should not resort to using this, thereby reducing the morale of staff. In fact, every endeavor should be made by management to support its employees in this pandemic era. Acts like deferring payments, deferring bonus payments, and increments, etc., are understandable. You may convince the management to refrain from such acts. Your management can think of deferring leaves instead of total scrapping.

Dear friend, whatever the type of your establishment, it would be covered by one of the establishment-specific labor laws. As far as I know, there is no establishment-specific labor law without provisions for leave. Statutory leave of absence comes in various forms such as casual leave, sick leave, earned or privilege leave, depending on the type of the establishment. Even if your establishment is not subject to laws like the Factories Act 1948 or the Shops and Establishments Act, the practice of granting leave under the terms of the employment contract or service regulations becomes a customary benefit for employees over time, and therefore, it cannot be unilaterally curtailed. Any attempt to do so would be considered illegal on the part of the employer.

As an HR manager, it is your responsibility to bring this to the employer's attention, citing the specific provisions of applicable labor laws. The current situation, such as the nationwide lockdown and its adverse effects on the industry, cannot be used by any employer as an excuse to violate the laws of the land.

Please let me know if you need further assistance.

Violation of Employment Laws

The cited act of the employer is a blatant violation of provisions not only of the employment-related laws but also sets a dangerous precedent likely to be copied by unscrupulous others. Please aid and advise the employer to take note that all registered establishments and all workplaces in our country are governed by the laws of the land, and the persons employed have fundamental rights guaranteed by the Constitution of India. No terms of employment can be legally withdrawn by any unilateral act by any of the consenting parties to the employment contract. Arbitrary actions are more often challenged in the courts, and wrongdoing is rectified with or without penalties. Prevention is better than cure.

Regards, Harsh K Sharan, Kritarth Consulting, 27 May 2020