Is It Mandatory to Pay Workers for a Government-Declared Holiday on a Sunday? Seeking Clarification

Dear Sir/Madam,

Good afternoon. While searching for information related to statutory compliance for labor, we came across this group. After reviewing the questions and answers, it seems very informative.

Understanding Government Rules Regarding Holidays Declared on Sundays

I am interested in understanding the government rules regarding holidays declared on Sundays. I have already completed all the necessary paperwork for labor, such as ESI, PF, gratuity, and worker payments for the month of April 2024 based on the previously declared holiday list. However, upon further inspection, I found out that the Telangana government had declared a holiday on 14.4.2024. They are now instructing me to pay the workers for the holiday and complete ESI, PF, and gratuity procedures.

Is it mandatory to pay workers for a holiday declared on a Sunday when no laborers were present for work? Could you please provide a circular or document to support this?

Thank you.

Difference Between Workers Employed and Workers in Service

The basic difference between a worker employed and a worker in service will apply in such scenarios. There are two things: a worker may be employed either on monthly wages or daily wages. It may be a fixed amount for the month or variable, depending upon the number of days in the month. In the case of fixed wages per month, it will be the same for all months, whether it be January, February, or April. In the case of monthly wages based on the calendar days in the month, it will change depending on the days in the month. In the case of fixed monthly wages, a weekly off day will automatically be counted as a paid day. At the same time, if the wages are calculated per day, wages will accrue only for the days the worker works or is employed.

Minimum Wages Act and Daily Rate Calculation

The Minimum Wages Act prescribes that the daily rate of wages should be arrived at by dividing the monthly wages by 26. The purpose of this calculation is to ensure that payment for 4 weekly off days is included in the daily rate of wages. Therefore, there is no need to pay any wages for the weekly off day on which the worker is not employed.

Special Circumstances for Paid Holidays

However, in special circumstances, the government will instruct the employer to give paid holidays to the workers. Suppose General Election day is declared as a holiday by the government. This is to ensure that every employee will participate in the election and cast their vote. They should not say that they had work, and abstaining from work would make them lose wages for the day. A similar case arises with closures declared due to a pandemic situation. When the government declared a lockdown, there was a direction that no worker should lose their wages. If that direction was not present, after a few days, everyone would come out of their house in search of a job, and the very purpose of the lockdown would be defeated. Though many employers approached the Court, and the Court also said that the employers are not under any statutory obligations to pay wages for the days the workers did not work, in principle, they are liable to pay wages.

Daily Basis Workers and Employment Relationship

Now, in the case of workers hired on a daily basis, there is no employee-employer relationship that will extend beyond the day of employment. They are hired to work for a day, and as soon as the work is over or when they complete 8 hours of work, they are paid their wages. In such a situation, they are not 'employed' on Sundays when the company is not working. A worker not employed will not be in 'service' also. Then there is no need to pay wages for the day declared by the government as a holiday, in addition to the holidays declared by the organization following the Industrial Establishment National and Festival Holidays Act of the state.

Monthly Hired Employees and Continuous Employment

In the case of employees who are hired for a month but payment is calculated on the basis of the number of calendar days present for work, there will exist an employee-employer relationship throughout the month. That is, suppose that Sunday is a weekly off day, and the day is unpaid. But without any request from the worker or without any direction from the employer, they can come and work on Monday also. This is because the employee-employer relationship did not end on Saturday but was available even on Sunday. Simply, they are in the 'service' of the employer even though they are not employed on holidays. In such scenarios, if the government has declared a holiday on Sunday, the worker is entitled to get wages.

If wages are paid, you should pay ESI and PF for those wages.

If you have found such a circular, you should share it as an attachment so people can better understand what you mean.

Understanding Holiday Compliance

Basically, it says that you must give a holiday and cannot deduct salary for that day. If it was a weekly off and you are not deducting salary for it, then you are still in compliance with the circular.

I presume your establishment is covered under this Act.

Extract of relevant provisions from the Telangana Shops and Establishments Act, 1988 (Act No. 20 of 1988):

"12. Closing of shops and grant of holidays. - (1) Every shop, whether with or without employees, shall remain closed on every Sunday, which shall be a holiday for every employee in the shop: Provided that the Chief Inspector may, by notification, specify in respect of any shop or class of shops or in respect of shops or class of shops in any area any day in the week instead of Sunday on which day such shop or class of shops shall remain closed.

(2) (a) The Chief Inspector may, by notification, require in respect of any specified class of shops that they shall, in addition to the weekly holiday mentioned in sub-section (1), be closed for one half day in a week, as may be fixed by the Government; (b) Every employee in any shop to which a notification under clause (a) applies shall be allowed in each week an additional holiday of one half day fixed for the closing of the shop under clause (a).

(3) The Chief Inspector may, for the purposes of subsection (2), fix different hours for different classes of shops or for different areas or for different times of the year.

(4) The weekly day on which a shop is closed in pursuance of a requirement under sub-section (2) shall be specified by the employer in a notice prominently exhibited in a conspicuous place in the shop.

(5) It shall not be lawful for the employer to call an employee at or for the employee to go to his shop or any place for any work in connection with the business of his shop on any day or part of the day on which it has remained closed.

(6) No deduction shall be made from the wages of any employee in a shop on account of any day or part of a day on which it has remained closed; and if such employee is employed on the basis that he would not ordinarily receive wages for such day or part of a day, he shall nonetheless be paid for such day or part of a day the wages he would have drawn had the shop not remained closed, or had the holiday not been allowed, on that day or part of a day."

Even if covered under different acts such as the Factories Act, the provisions applicable thereunder also more or less shall remain as above. It's okay if a holiday is declared. Where's the question of paying anybody 'holiday wages' if no one is deployed during that declared holiday? I think the question does not arise.