How Should We Handle Leave Allocation for Employees of Our Newly Acquired Company?

Hello All,

Our company is a small-scale one that has recently acquired another small-scale company. The company that has been acquired did not have any policies, paperwork documented, or tracked. Can you please suggest what could be done in the case of allocating leaves for the year 2021 to the employees of the acquired company?

Though the company has been acquired, it will still be known and functional as a separate entity from our organization, and we do not wish to completely change its culture.

Leave Allocation Options for Acquired Company

In such a case, what would be better: to start afresh by giving the total number of leaves that we provide in the parent organization, or to give certain grace carry forward leaves? There is no previous track of the number of leaves availed by those employees. Looking for suggestions!

Starting on a Clean Slate

It is better to start on a clean slate since no proper record exists. If you provide for continuing the old account, employees may try to take advantage unfairly, and you will not be able to verify the claims and counterclaims. It is better to keep the Pandora's box closed, as the proverb goes. The leave policy has to be slightly at variance with the original organization to maintain its separate identity.

If your newly acquired entity comes within the purview of the State Shops and Establishment Act, then minimum leaves are stipulated which you have to follow. If you are a Factory, then the Factories Act also lays down minimum earned leave. Besides, sickness and absence due to sickness will be governed by the ESI Act if it applies to you.

You need to check these aspects of applicability which will guide you for your legal obligations on leaves as a starter.

Regards, Vinayak Nagarkar
HR and Employee Relations Consultant