Removing Casual and Annual Leave: What Could This Mean for Employers?

Hi Team, I would like to know if any company wants to remove casual leave and annual leave from their policies, how it's going to impact the employer.

Understanding Leave as a Mandatory Employment Benefit

"Leave" is a mandatory benefit of employment under labor laws as well as under service regulations pertaining to any other class of employees in all organizations. The term "leave" denotes "the leave of absence from work" granted to an employee by his/her employer with or without loss of earnings and without detriment to continuity of service due to certain reasons necessitated by inevitable circumstances subject to certain conditions. Thus, leave, as one among the conditions of employment, postulates one among the decisive and salient features of the employer-employee relationship.

Therefore, if an employer adopts a "no leave policy" or removes certain kinds of leave suddenly and unilaterally, no doubt it would be a contravention under the provisions of the establishment-specific labor law applicable, leading to prosecution and a valid industrial dispute in this regard.

Hello Deeksha, I may add to what has been said by the learned member, I couldn't guess what prompted you to think along these lines. Human beings are social animals, and animals have their lives cut out. In the evolution of humankind, everyone has reached a stage where "man does not live by bread alone." Because man does not live by eating alone, he also has to make his life "meaningful." If eating alone were the only 'life,' man would have stopped growing grains and no longer worked. But after thousands of years of human life, we needed many things other than bread. We work, earn, eat, clothe ourselves, but also have to do many other things. We are not machines; a machine can be idle once switched off and remain as a machine. But man? Imagine trying to be idle, doing nothing. Don't speak, don't hear, laugh, weep, quarrel, fight, move around, and so on. Try for a day; you can't. Even a madman can't remain frozen. That's what social life means. We have certain duties to perform outside office work/duty. We don't feel alright, unwell, and attend functions, go shopping, worship, travel. Family and domestic obligations must be fulfilled at any cost. Even a sage/hermit/recluse/eremite who renounced worldly affairs has some other duties to perform. And for that, they require off-duty, and thus leave is availed, no matter what you call it. Why, for instance, do many units still not have a kind called Casual Leave? But still, they would have EL or PL, Sick leave, Maternity leave, etc. Yes, you are right; persons like peasants/farmers, freelancers will have no leave of these kinds, but they may take 'leave of absence' from their routine. No approval from anybody would be required. They are not employees but professionals. So ultimately, you have to shun the tag of 'employee' and become a professional/self-employed to eliminate 'kinds of leave.' Will you?

But every citizen has to abide by the law of the land and governance enabled/done by various pertinent regulations and stipulations to ensure minimum requirements. One among them is the Leave policy. Policies may differ, but leave stays put in one name or another.

Dear Umakanthan Sir, in addition to what you have said, with due respect to you, I submit as under:

- Annual leave is mandatory as per the law.
- Casual leave is not necessarily mandatory. In certain states, I found there is no provision for casual leave.
- When you give anything to employees over time, whether it is mandatory to give or not, it becomes compulsory to give, and you cannot stop it unilaterally.
- When you provide anything beyond what the law requires and wish to discontinue it now, you cannot do so unilaterally by stating that it exceeded legal requirements.
- In the given case, annual leave cannot be completely removed.
- Annual leave exceeding legal requirements can be restricted to comply with the law. Casual leave can also be restricted to legal limits but not unilaterally.
- Leave with wages and holiday-related matters are listed at Sr. 5 in Schedule IV of the ID Act. Any changes in the matters listed in Schedule IV of the ID Act must follow section 9A of the ID Act.

Avoiding casual leaves and annual leaves for employees goes against the principles of natural justice and labor laws. According to the Industrial Employment (Standing Orders) Act of 1946, it is a binding factor for any company with authentication by the government.

Therefore, not granting casual leaves and annual leaves is a violation of labor laws.

Dear colleague, if your establishment falls within the purview of the Factories Act or State Shops and Establishment Act, you have a statutory obligation to provide leave with wages as required. Considering the withdrawal of leave benefits may result in penal implications, as highlighted by our knowledgeable colleagues.

Therefore, any contemplation of stopping these benefits reflects nothing but misguided thinking. It is advisable to refrain from such actions.

Regarding a small clarification, the Model Standing Orders under the Industrial Employment Standing Orders Act outline the rules for casual leave. Additionally, certain State Shops Acts, like in Maharashtra, also specify provisions for casual and sick leave.

Regards, Vinayak Nagarkar
HR and Employee Relations Consultant