As per the Factory Act, a worker is eligible for Earned Leaves after the completion of 240 working days. They will be paid 12 EL for the 240 working days. However, there is some confusion regarding the definition of working days. Some individuals believe that working days include Sundays and holidays, while in reality, working days refer to days excluding Sundays and holidays. Some professionals suggest that 18 leaves should be paid in a year (365/15 = 18). Nevertheless, based on the actual working days in a year, which are around 300 to 302, only 15 EL should be paid. Please clarify this discrepancy.
From United States, Cambridge
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From United States, Cambridge
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Let us see what the Factories Act says.
Eligibility
An employee is eligible for leave (earned leave or annual leave with wages as it is called in the Act) only if they have worked for 240 days. An employee who has joined during the year will be eligible to get earned leave in the current year if they have worked for 120 days in the six-month period or simply 20 days in a month.
For deciding eligibility, all paid days should be taken into account. This means that the 240 days include all weekly off days, holidays, and leave days for which the employee was paid wages/salary. The days an employee remained absent or on leave under ESI, due to employment injury, accidents, or occupational diseases should also be considered as days worked for the purpose of eligibility. Similarly, the days an employee was given layoff shall also be counted as working days.
For example, suppose a person had physically worked for 150 days in the preceding calendar year (2022). They had taken 10 days of earned leave during 2022. They had met with an accident while on duty and were on leave for another 8 days. On account of the shortage of materials, they were given a layoff for 10 days in 2022. They were paid weekly off wages for 52 days and had enjoyed 10 days of holidays in 2022.
Now, they will be eligible for earned leave in 2023 because they satisfy the eligibility condition. Though they had come to the factory for only 150 days, they were paid for 222 days (52 weekly off, 10 holidays, 10 days earned leaves which they should have earned from the last year). They were paid by the ESIC for 8 days (or by the company itself for the leave admissible under the Employees Compensation Act if not covered by ESI) and were paid half the salary for 10 days as layoff compensation. The total is 240 days.
Entitlement for Leave
Now, coming to the entitlement for leave, we will take only the days they were physically present for work in the factory, which is 150, and they will ultimately earn only 7.5 or 8 days of leave at the rate of one day for every 20 days worked.
For eligibility of 240 days, we will consider all paid days plus days of layoff and days for which ESI had paid salary, but for the number of days of leave, we take only days physically present.
From India, Kannur
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4526Eligibility
An employee is eligible for leave (earned leave or annual leave with wages as it is called in the Act) only if they have worked for 240 days. An employee who has joined during the year will be eligible to get earned leave in the current year if they have worked for 120 days in the six-month period or simply 20 days in a month.
For deciding eligibility, all paid days should be taken into account. This means that the 240 days include all weekly off days, holidays, and leave days for which the employee was paid wages/salary. The days an employee remained absent or on leave under ESI, due to employment injury, accidents, or occupational diseases should also be considered as days worked for the purpose of eligibility. Similarly, the days an employee was given layoff shall also be counted as working days.
For example, suppose a person had physically worked for 150 days in the preceding calendar year (2022). They had taken 10 days of earned leave during 2022. They had met with an accident while on duty and were on leave for another 8 days. On account of the shortage of materials, they were given a layoff for 10 days in 2022. They were paid weekly off wages for 52 days and had enjoyed 10 days of holidays in 2022.
Now, they will be eligible for earned leave in 2023 because they satisfy the eligibility condition. Though they had come to the factory for only 150 days, they were paid for 222 days (52 weekly off, 10 holidays, 10 days earned leaves which they should have earned from the last year). They were paid by the ESIC for 8 days (or by the company itself for the leave admissible under the Employees Compensation Act if not covered by ESI) and were paid half the salary for 10 days as layoff compensation. The total is 240 days.
Entitlement for Leave
Now, coming to the entitlement for leave, we will take only the days they were physically present for work in the factory, which is 150, and they will ultimately earn only 7.5 or 8 days of leave at the rate of one day for every 20 days worked.
For eligibility of 240 days, we will consider all paid days plus days of layoff and days for which ESI had paid salary, but for the number of days of leave, we take only days physically present.
From India, Kannur
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FACTORIES ACT-leave rules.doc
Factories Act-Sec.79-Leav e.pdf