Is a Single Leave Policy Feasible? Seeking Insights and Templates from HR Peers

Dear HR Colleagues,

Our management would like to remove the segregation of leaves—PL, CL, SL—and assign a fixed number of leaves per annum. Is this possible? Has this been implemented in any of your companies? If so, can you share a template of such a leave policy?

Thank you!

Dear Lata, the Shops and Establishment Act and Factories Act both do not provide any specific breakdown of leave. This is determined by the management of the respective company. Both acts mandate awarding 1 day of paid leave for every 20 days of work rendered by the employee. Therefore, if one removes 52 Sundays and 10 national and closed holidays from 365 days, one gets 303 days. Dividing this number by 20 results in 15. Therefore, a maximum of 15 days of leave is admissible to the employee. It is called earned leave. The company management may grant more than 15 days of leave per annum but not less.

Thanks,

Dinesh Divekar

From the nomenclature of the various kinds of leave used in the post, I presume yours is an establishment falling under the Shops and Establishments Act. The statutory classification of leave benefits into different kinds is not without purpose. CL and SL are lapsable leaves, and their availment is linked to the factor of contingency or emergency beyond the control of the employee, whereas PL is an accruable leave that can be carried forward to subsequent years subject to a certain ceiling and forms part of terminal benefits. How can you combine them into one?

Even if your establishment is a factory and you are giving CL and SL in addition to the statutory annual leave with wages, it cannot be done without giving a notice under Section 9-A of the IDA, 1947.

Dear Dinesh Divekar ji, I appreciate your involvement in Labour Law subjects even though you are not from this field, I suppose. You have a fairly good knowledge of Labour Laws as well. You deserve kudos, Sir. More than 7500 posts widely appreciated by members.

I would just like to draw your kind attention to the fact that some states have provisions for casual leave as well as sick leave under their respective State Shop Acts. For example, the Maharashtra New Shop Act has a provision of 8 CL, Delhi has a combined CL/SL of 12 days, and in Punjab & Haryana, CL is 7 days and SL is 7 days, to the best of my knowledge.

Dear colleague, It is rightly pointed out by Mr. Akhil that some State Shops Act/Rules provide for CL, SL, and even paid holidays in addition to earned leaves, as in the Maharashtra Shops Act. Since CL and SL are statutorily mandatory (check your State Shop Act/Rules), combining all leaves into a single leave will amount to breaching the provisions of the Act.

Reasons Against Combining Leaves

There is another good reason why combining will be disadvantageous. The balance of earned leave at the time of an employee's departure from the job is encashable, whereas other types are not. Therefore, even assuming you could combine all leaves into one, the quantum of encashment having increased, the money outgo will be higher.

Adherence to Law and Practice

Besides, giving different types of leaves is so well-entrenched in the industrial system that even if you can, departure from this will not accrue any advantage to either party. Therefore, it is better to stay tuned to the law and widespread prevalent practice in this regard.

Regards, Vinayak Nagarkar HR and Employee Relations Consultant

As rightly pointed out by the learned member Shri Umakanthan, the leaves are segregated with a purpose. While casual leaves are usually for attending any personal work that requires your presence at a particular place other than your place of work on a working day, sick leave does not need any explanation. Both of these are lapsable at the end of the calendar year, while vacation leaves (usually 15 per one year of service) can be carried forward subject to a maximum of 60 as per the Shops & Establishment Act in most states of the country.

Unless the management of your company is generous enough to offer policies that go beyond the mentioned ones, it would be deemed non-employee friendly and hence not acceptable. You need to explain why leaves cannot or should not be clubbed.

Thanks and Regards

Doubt regarding leave policy

Assuming CL=12, SL=12, EL=15, totaling 39 leaves. If we just write "Leave" in the attendance register without specifying the type of leave and provide 39 leaves per year to an employee, is it right or wrong? Can all these leaves be single-day leaves instead of a group of days?

Compliance with Leave Register Requirements

If there is a prescribed leave register under the applicable Act to be maintained with different types of leave, what will you do? In the attendance register, you can simply note as 'L' for leave of absence. However, the corresponding entry in the leave register should indicate the type of leave. If a law or rule prescribes something to be done in a specific way, proper compliance means doing that thing in the way prescribed only. If we try to be more intelligent than the lawmakers, our actions would likely result in violations.

Thank you for your response. I have gained clarity regarding it.

Question about Shops Leave Policy

I also have another question regarding Shops. Can Earned Leave (EL) be taken on a single-day basis, or should it be a group of days? For instance, on the 1st, 4th, 6th, 9th, and 16th (5 days), or should it be a range like the 10th to the 14th (5 days)?

Frequency of Taking Earned Leave

Furthermore, how many times can EL be taken in a year? Is it limited to only 2 times, or can it be taken once every month?

Leave Duration and Policy Considerations

How long any leave can be availed at a stretch by employees, either individually or in combination with various kinds of leave, as well as prefixing and suffixing holidays with leave, are matters to be provided in the Leave Policy of the organization. This should be considered in light of the unabated workflow.

Dear colleague, it is good to see you moving beyond a single leave mindset.

Establishing a Leave Policy

For all types of leaves, please establish your own policy and procedure and notify all concerned.

Creating a Policy on Earned Leave (EL)

Regarding your query on EL, you can create a policy on eligibility, the minimum number of EL days that can be taken at a time (EL is intended for rest and recuperation; however, in practice, it is often taken for extended periods, and taking a day's EL is discouraged), prefixing and suffixing to weekly/paid holidays and other leaves, the maximum days allowed to carry over, and the option for encashment of EL if desired.

There is no one-size-fits-all formula in this regard, and each organization is free to establish its own rules. However, when formulating the rules, consider legal provisions and the general practices followed by similar companies in your industry or locality.

Regards,
Vinayak Nagarkar
HR and Employee Relations Consultant