Balancing Leave Fairness for Office and Remote Workers: How Should We Tackle This?

When we started the company in 2020, we had branches in Chennai and Hyderabad. Hence, candidates were hired from Chennai and Hyderabad respectively. Hyderabad was the main development center. Due to the pandemic, employees were given the WFH option from 2020 to 2022.

During this period, we closed down our Chennai office and continued operations at the Hyderabad center. In 2023, we decided to ask Hyderabad employees to come to the office, while Chennai employees continued to work from home.

Leave Policy Concerns

My question pertains to our leave policy. Currently, there is not much work, but Hyderabad employees are required to come to the office with no WFH option. If they take time off, it gets noticed, and their leaves are consumed in our HRMS when they apply for leave. On the other hand, Chennai employees rarely apply for leave and always appear available when called upon. It's challenging to determine if they are at home or elsewhere since there isn't much work, and they have access to emails and Microsoft Teams on their mobile devices.

Current Leave Structure

We offer 12 Paid Leaves, 6 Casual Leaves, and 6 Sick Leaves per year (with monthly credits of 1 PL, 0.5 CL, and 0.5 SL). Paid Leaves accumulate, with a maximum of 30 leaves carried forward to the next year and can be encashed upon leaving the organization. Chennai employees have accumulated 30+ leaves over the years, while Hyderabad employees seem to be utilizing their leaves.

Questions Regarding Fairness and Policy Changes

My questions are:
a) Are we being unfair to Hyderabad employees?
b) If we change the policy for the next year to state that only 15 leaves can be carried forward, and the rest must be used by December or will lapse, is this entirely unfair to Chennai employees who have accumulated these leaves?
c) What would be the best approach to address this without changing the policy?

First of all, let me say that the leaves you credit to your employees are not as per the law in force. As per the Tamil Nadu Shops and Commercial Establishments Act, you are expected to provide 12 days of casual leave, 12 days of sick leave, and 12 days of earned leave. Earned leave should be credited once an employee completes 12 months of service with the company. This can be accumulated up to 45 days.

There cannot be a lesser number of leaves for employees who work from home. You cannot decrease the number of leaves that can be accumulated or carried forward. This is against the law and can be challenged. If you feel that those who work from home misuse the leaves by being available online or doing personal work, the only option available is calling them back to the office. Bringing them back to work from the office would incur some overhead expenses. If you think that is a significant cost, let the employees continue working from home, but you should trust them. If you want parity with employees in Hyderabad, you may need to compromise on the cost side.

Thank you for responding, Mr. Madhu. I understand that somewhere we will need to compromise.

Telangana Leave Laws

Coming to the number of leaves in a year with regard to CL & SL, would you be able to tell me what the Telangana law says? I am asking because I know of some companies that have the same arrangement as ours or have clubbed CL & SL to 15 days + earned leaves of 15 days.

Leave Entitlements Under the Telangana Shops and Commercial Establishments Act, 1988

The leaves admissible to employees in IT companies are governed by Section 30 of the Telangana Shops and Commercial Establishments Act, 1988. Accordingly, there are 15 days of earned leave for every employee who has completed 240 days in a 12-month period. Similarly, the number of casual leave (CL) is 12 days, and the number of sick leave is 12 days. The earned leave under the Telangana Act can be accumulated up to 60 days. Though there are some restrictions regarding the number of times an employee can avail the earned leave, an employee cannot avail such earned leaves more than three times in a year (of 12 months); there is a provision for encashment of 8 leave while in service.

In addition to the earned leave, CL, and SL referred to above, an employee who has completed two years with the same employer shall be entitled to six days of special leave for vasectomy or tubectomy operation. Of course, this will be a one-time leave.

State-Specific Leave Rules

The leave rules for IT and other establishments not being a factory, mine, or plantation, being part of the state's Act on shops and commercial establishments, will be different for each state. When your employees in Tamil Nadu can follow Tamil Nadu rules for various leaves, your Telangana employees shall follow the Telangana rules. This cannot be taken as unfair. In the same way, there are holidays separate for each state. When you have nine holidays in Telangana, the number is the same for employees in Tamil Nadu. But the number of festival holidays, which the employees and employer can decide in Tamil Nadu, is five; the same in Telangana is four because in Telangana, November 1st is a mandatory holiday on account of state formation day. That does not make the leave and holidays policy unfair in any way.

If you feel that your establishment should be legally compliant, you should change your leave policy and follow the Act (Telangana Shops and Commercial Establishments Act 1988).

Thank you for responding, Mr. Madhu. I understand that somewhere we will need to compromise. Coming to the number of leaves in a year with regard to CL & SL, would you be able to tell me what the Telangana law says? I am asking because I know of some companies that have the same arrangement as ours or have clubbed CL & SL to 15 days + earned leaves of 15 days.