Workplace Leave Policy in India

Workplace Leave Policy in India
31 March 2020

Workplace Leave Policy in India

Labour law is the area of law which signifies the relationship between a worker, trade union and government at large. It plays a major important role in protecting the rights of labour, their union, their wages, and moreover building a link between government and workers. It is a protective code for labourers, workers, and employees as well, to make them aware of their rights and also, to establish a standard law regarding labour work practice. Labour law is often incorrectly conflated with Employment law. However, Employment law is the area of law that specifically deals with the relationship between an employer and employee.

Employment laws set the umbrella framework for deciding different dimensions of leave, like category or types, eligibility, duration, etc. Many companies and organizations categorize leaves in different categories like casual leave, sick leave, earned leave, maternity leave, special leaves, loss of pay leave, compensatory leave, etc.

In case of employment contacts, where trade unions are involved in deciding employment contacts, leave rules are formulated in consultation with the unions. Such elaborate consultation is specified in The Industrial Employment Standing Orders Act which is formed for enforcement of different conditions of services.

In India, three types of leaves are generally followed namely earned leave, sick leave, and casual leave. Different provisions exist under different laws, for different categories of leaves. Details of each category are elaborated hereunder. While the Act specifies the broad framework, the notified rules under each legislation detail the implementation or applicability of these leave policies.

Earned Leave

Earned Leave is also called Paid Leave. This is employees Earned Leave for one year. Which can be used later at any time. If you take leave and have Earned Leave in your account, then the company will first deduce your leave from Earned Leave and after that leave, take this leave as unpaid leave and deduct money from your salary. You can get these Earned Leave en-chased while leaving the company. Whose money of Earned Leave will be equal to your one-day Basic + DA Salary. According to different laws, the number of Earned Leave will be as follows -

  1. Factory Workers are required to work at least a minimum of 240 days in a year to take advantage of Earned Leave. Adult Worker gets 1 day (1 Earned Leave) for every last 20 days, and children under 15 get 1 day (1 Earned Leave) for every 15 days of work. Now according to this, you can calculate your Earned Leave by yourself. 
  2. Mine Worker can avail 1 day for every 15 days of work done below ground and people working above ground can avail 1 day for every 20 days of work.
  3. Beedi or cigar factory workers get 1 day off for every 20 days of work in the previous year. If the employee is a child below 15 years of age, then he gets 1 day of work for every 15 days.
  4. People working in sales, and a newspaper company (which includes journalists) can avail Earned Leave for one month for every 11 months of work.
  5. Domestic Workers are also eligible for 15 days of Earned Leave in a year.
Casual Leave ( Casual Leave)

This is another Paid Leave that is not Earned, only entitled to employees if prior permission is given by the Organization. If the employer does not give permission and the employee still takes leave, then his salary is deducted for that day's leave. 

If an employee has taken CL (Casual Leave), then he is not considered as Absent from Duty. 

Usually, every organization offers a certain number of Casual Leave in a year, which is decided by the company's administration. However, the law for some types of workers is as follows:

  1. Sales and newspaper employees (including journalists) are entitled to Casual Leave for 15 days in a year.
  2. Apprentices are entitled to 12 days of Casual Leave annually.
Sick / Medical Leave

Employers offer their employees Sick / Medical Leave when they are ill. Some organizations / Company ask for a Medical Certificate to Sick / Medical Leave Approve when sick. This is not necessary if the employee has used all the medical leave given by his company and uses Earned Leave in his illness. 

Medical Leave can also be used in the following year by Carry Forward. However, its specifications are determined by the Company Administration Company. The laws governing Medical Leave for various types of employees are -

  1. An Apprentice is entitled to 15 days of sick leave in a year. It can be stored for a maximum of 40 days. 
  2. Journalists and newspaper employees can avail one-month medical leave for every 18 months of work. During medical leave, employees are paid half of the day's salary.
  3. Sales Employee newspapers are entitled to Medical Leave as employees. However, he essentially needs to show a medical certificate for his absence.
National Holidays

Every state government is empowered to declare national, festival and other mandatory holidays for industrial establishments under their respective Industrial Establishment Acts, e.g. Delhi has adopted The Punjab Industrial Establishment (National And Festival Holidays And Casual and Sick Leave) Act, 1965 whereby ever worker shall is entitled to the following mandatory holidays in each calendar year:

  1. Three national holidays of one whole day each on the 26th January, 15th August, and 2nd October; and
  2. Four other festival holidays.

On a similar note, state governments under their respective shops and establishment acts may declare mandatory national and other holidays for non-factory workers e.g., Delhi Shops & Establishment Act, 1954 mandates three national holidays of one whole day each on the 26th January, 15th August, and 2nd October.

As per Indian law, if an employee is asked to work on national holidays, he either gets a compensatory off or is eligible to get double the pay. It also depends on the state National Holidays Act, where it is specified what will be the procedure of asking an employee to work on a national holiday and how shall he be compensated legally. The National and Festival Holiday Act can differ according to different states. It is also specified under different acts that one must procure the consent from the labor authorities to allow its employees to work on a national holiday. 

Weekend Holidays

In India, the law prescribes a maximum number of hours a week a worker may not be employed beyond. An adult worker shall not be employed for more than 48 (forty-eight) hours in a week and not more than 9 (nine) hours in a day. Weekly holiday is compulsory as per the Factories Act. The first day of the week i.e. Sunday shall be a weekly holiday. The employer has to make sure that no worker works more than 10 days without a rest day of 24 hours. Therefore, if the worker is asked to work on a weekly holiday, he should have a full holiday on one of three days immediately or after the normal day of the holiday. Accordingly, the weekly holiday i.e. at least one full day holiday every week may be changed from Sunday to other days of a week by following the procedure laid down under section 52 of the Factories Act, 1948, which requires delivery of a notice to the local labor inspector before making such changes in the weekly holidays.

Similar provisions have been adopted under the shops and establishment acts of various states in India.

Maternity Leave

Maternity leave in India” is a paid leave of absence from work that allows women employees the benefit of taking care of their newly born, and at the same time retain their jobs.

India is a developing country, and our first Maternity leave Act was established back in 1961 called, The Maternity leave Benefit Act 1961. This Act ensured women employees get a paid leave of 12 weeks post-delivery for taking care of the new-born. This Act applies to establishments with ten plus employees. The Act applies to women employees on a contract, permanent basis, or engaged with agencies.

The current employment scenario has changed, and we have a significant chunk of female employees taking jobs. The maternity act was subject to change due to social & economic changes. In 2017, The Maternity leave Act was revised as The Maternity leave (Amendment) Bill 2017.

  1. Extension of period- The Maternity (Amendment) Bill 2017 has extended the earlier 12 weeks’ leave to 26 weeks. The pregnant employee can bifurcate the leave as post and pre-delivery. 8 weeks of leave can opt before the delivery and remaining post-childbirth. For women expecting the third child, the maternity leave allotted is 12 weeks. 
  2. Maternity leave Law for adoptive mothers- The law states a 12 weeks leave for the adopting mother. This leave starts from the day of adoption and is applicable for the baby below three months of age.
  3. Maternity law for commissioning mothers in India- The advent of technology has brought relief and joy to many families who were unable to conceive naturally. The maternity leave law here states a 12 week leave to the biological mother who imparts her egg to create an embryo which is then planted in another woman.
  4. Tubectomy during pregnancy- In the case of tubectomy, a woman on the production of the prescribed papers can opt for two weeks’ leave, immediately from the date of the tubectomy operation.
  5. Critical illness post-maternity- Pregnancy is a complicated process and could be life-threatening too. The Maternity leave Amendment Bill 2017 allows a benefit of one month for women who are suffering from critical circumstances like – Pre-mature delivery, miscarriage & medical termination of pregnancy. 
  6. Leave for government civil employees- Female civil employees benefit from a paid leave of 180 days for the first two live-born children.
  7. Leave for Private sector employees- Private sector female employees have to ensure maternity leave policies with their HR team. The leave and payment provisions vary for different companies.
Procedure for compensation for leaves 

A worker who is discharged, dismissed or quits employment is entitled to avail wages in lieu of the leaves to which he was entitled immediately before such discharge, dismissal or resignation. The Factories Act also lays down strict deadlines for making payment of wages in lieu of the leaves.

Similar to the provisions of the Factories Act, an employee entitled to privilege leave is entitled to leave encashment at the time of leaving the job. However, an employee is not entitled to encash the casual leaves he is entitled to.

Carry Forward of Leaves and Annual Encashment

A worker is allowed to carry forward his leaves to the succeeding year in the event the worker does not avail the whole of the leave allowed to him. However, such carry forwarding of accumulated holidays is restricted to a maximum of thirty (30) days in case of an adult and forty (40) days in case of a non-adult worker. In some cases, such as where leave was refused to the worker in accordance with the provisions of the Factories Act, a worker may be allowed to carry forward his leave without any limit. The law does not specifically provide for the option of leave encashment, however, it does not prohibit a worker from voluntarily choosing the option of leave encashment. Therefore, in practice, leave encashment policy is either part of the Human Resource (HR) Policy of an organization or forms part of the employment contract of a worker. Since the law does not specifically provide for leave encashment mechanism, however, by virtue of Section 80 of the Factories Act, that entitles a worker for wages at a rate equal to the daily average of his total full-time earnings for the days on which he actually worked during the month immediately preceding the leave. Such wages shall be exclusive of any overtime wages for the purpose of calculating the wages for leave period but inclusive of dearness allowance and cash equivalent of regular advantages such as concessional food or other articles.

Similarly, a non-factory employee is entitled to carry forward his leaves as per the relevant provisions of the shops & establishment acts of the respective states. In Delhi, an employee may carry forward his accumulated privilege leave to the succeeding year subject to a maximum of three times the period of privilege leave to which he is entitled after every twelve months' employment. However, casual leaves may not be carried forward.