Yes, the concept of Leave Without Pay (LWP) is legally permissible in India. However, it's important to note that the terms and conditions of LWP should be clearly mentioned in the employment contract or company policy to avoid any legal complications.
The Industrial Employment (Standing Orders) Act, 1946, which applies to industrial establishments employing 100 or more workers, does not specifically mention LWP. However, it does state that employers can frame rules on leave policy as per their discretion, provided they are not in violation of any laws.
Here are some steps you can follow to implement LWP:
1. 📝 Draft a clear policy on LWP, including the conditions under which it can be availed, the maximum duration, and the impact on employee benefits and seniority.
2. 📚 Ensure this policy is in line with the Shops and Establishment Act of your state, the Payment of Wages Act, 1936, and other relevant laws.
3. 🤝 Include the LWP policy in the employment contract or company policy and ensure it is communicated to all employees.
4. 🔄 Regularly review and update the policy as per changes in labor laws.
Remember, it's always advisable to consult with a legal expert or labor law consultant before implementing such policies to ensure legal compliance.