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Hi, I recently joined a logistic company. I proposed creating a leave policy, but my employee is refusing.
That we will not get into the hassle of CL, EL. If an employee takes leave, his salary will be deducted and if he does not take leave, we will make him extra payment that month. They are too adamant on this thinking.

Is there any written act or law on this?


From India, New Delhi
Dinesh Divekar

Dear Shruti Mathur,

If yours is a logistics company, then the provisions of the Shops and Establishment Act of your state (presumably Delhi) apply to your company. The company's administration must abide by the provisions. If the labour authorities notice any violations, it could create problems.

For every 20 days of attendance, an employee is eligible for a day's leave. Out of 365 days of the year, remove 52 Sundays and 10 closed holidays. Therefore, the working days are 303. When you divide this number by 20, you get 15. So each employee is eligible to get at least 15 days leave. If the Stops and Establishment Act of your state has made provisions for casual or sick leave, these also need to be added.

Regardless of the industry, there is a shortage of talent in the job market. To retain the employees, the companies take measures that go beyond the statutory provisions. If your company does not provide what is statutorily admissible, it could spread a negative image of your company, making it difficult to attract candidates. Additionally, denying statutory benefits could increase employee attrition. The cost of lost opportunities and employee attrition could be greater than the cost of employee leave.

In short, it is advisable to follow the law. infringing on the law may give temporary benefits, but these will last only until infringement is detected. In one stroke, the gains made will be nullified.


Dinesh Divekar

From India, Bangalore

Hi Nidhi

The following is the requirement under Delhi Shop and Establishment Act :

Sec 22. LEAVE

(1) Every person employed in an establishment shall be entitled :
(a) after every twelve months', continuous employment, to privilege leave for a total period of not less than fifteen days;
(b) in every year, to sickness or casual leave for a total period of not less than twelve days;

Provided further that a watchman or caretaker who has completed a period of twelve months in continuous employment and to whom the provisions of Section 8, 10, 11, 13 and 17 do not apply by virtue of an exemption granted under Section 4, shall be entitled to not less than thirty days' privilege leave.

(1A) Privilege leave can be accumulated unto three times PL granted under law, custom or award

(2) Employer shall pay him full wages for the period of leave due to him on termination or resignation

Every employee shall be paid for the period of his leave at a rate equivalent to the daily average of his wages for the days on which he actually worked during the preceding three months, exclusive of any earnings in respect of overtime but inclusive of dearness allowance.

(I have paraphrased some of the things to make it easier for non-lawyers to read. You can always look up the exact wording of the section).

So the act not only says the company has to give leave, but also how much and what type. It also says how leave salary is computed. So the company has no choice but to follow it. if they do not do so, then they are liable to prosecution, which only requires one employee to go and file a complaint and they will be at your door.

However, it is not compulsory to make a leave policy.
But it is compulsory to allow the leave required by the act
(Nothing stops you from giving better leave terms.)

also refer to sec 24 : CONTRACTING OUT
Any contract or agreement, whether made before or after the commencement of the Delhi Shops and Establishments (Amendment) Act, 1970, whereby an employee relinquishes any right conferred by this Act, shall be null and void in so far as it purports to deprive him of such right.

From India, Mumbai

When existing law/act, rules are adequate to govern the leave aspects in an establishment there is no compulsion to have a 'leave policy' in place. But elaborate 'leave policy' is always desirable to deal with circumstances as and when arises. If any administration don't advocate to draft & implement exclusive 'leave policy' such admin should be prepared to abide by the acts/rules applicable.
From India, Bangalore
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