Navigating Leave Policies in Kerala IT Companies: Seeking Clarity on Rules and Implementation

Dear All,

Looking for clarity on a few points regarding the Leave Policy applicable to IT Companies in Kerala.

1) Based on the Kerala Shops and Establishment Act, do all companies with more than 10 employees need to follow the Leave Policy given below, or is there an exemption in the number of CL/SL?

- 12 Days CL
- 12 Days SL
- 12 Days Earned Leave (PL) after 1 Year of Service with the Company

2) Considering a company with a staff size of 100 members, is it possible to implement the following leave policy?

- 6 Days CL
- 12 Days SL
- 12 Days PL after 1 Year of Service with the Company

In addition to the 4 (National Holidays) + 9 (Festival Holidays) = 13 Days Holiday Calendar.

3) Regarding the credit of PL, would the employee's PL leave balance be credited with 12 Days PL immediately after completing 1 year of continuous service, or would the credit be given as 1 Day PL per month starting from the 13th month to the 24th month of service? This is up to a maximum accumulation of 24 days PL in the 24 months following the 1 year of service completion.

Any help will be appreciated. Thank you.

Once you are registered as per the Kerala Shop & Establishment Act 1960, you are bound by it. There is no provision for dilution of the statutory requirement. The Act further emphasizes that an employee's right to receive leave benefits under any award, agreement, or contract of service is protected. Considering the location to be in Kerala State, it may not be advisable to tamper with any statutory benefit.

Hi @KK!HR, Thank you for your input. The intention is not to dilute the requirement but to better understand the specific requirement and eligibility mentioned in the Act. For example, regarding the credit of PL, would the employee's PL leave balance be credited with 12 days PL immediately after completing 1 year of continuous service, or would the credit be given as 1 day PL per month starting from the 13th month to the 24th month of service? This would be up to a maximum accumulation of 24 days PL in the 24 months following the completion of 1 year of service. Please let me know if you need any further clarification or information.

Copying your query:

1) In regard to the credit of PL, would the employee's PL leave balance be credited with 12 days PL immediately after completion of 1 year of continuous service - YES.

12 PL in a year means 1 PL in a month. However, unlike CL/SL, PL should be accrued by the employee. That means if a person puts in one month of service, he is entitled to get 1 PL. Similarly, if he completes one year of service, he will accrue 12 PL.

You may consider leaves based on the calendar year so that for an employee "A," if he joined you in January 22, you shall credit 6 days CL and 12 days SL, and 12 days PL shall be credited to "A" in January 23.

I trust this illustration clarified your doubt.

Leave Policy in Kerala

As per the law in Kerala, an employee is entitled to 12 days of Casual Leave (CL) and 12 days of Sick Leave (SL) per year. This can be proportionately allocated at the time of joining. For instance, an employee joining on 17th September 2022 may receive 3 days of CL and SL for the year 2022. If the employee joined on 1st or even 15th September, they can be given 4 CL and 4 SL, considering September as a full month. This is the standard practice in Kerala, and no Labour Authorities will question it.

Earned Leave Allocation

Regarding earned leave, the law states that after completing 12 months, an employee is entitled to 12 days of leave. This can be credited in October 2023. However, for accounting convenience, it is advisable to credit 3 days (for those who joined in the second half of September) or 4 days (for those who joined during the first half of September) on 1st January 2023. Then, credit the entire 12 days in the next year, i.e., on 1st January 2024. This approach satisfies both legal requirements and practical HR practices.