Dear Client,

Factories Act has provided annual/earned leave of 12 working days for all the workers who have worked at least 240 days in a year.

Under Shop and establishment act, minimum seven days casual leave and 14 days sick leave is provided to employees.

The Factories Act has provided annual/earned leave of 12 working days for all the workers who have worked at least 240 days in a year

2) Every state has different leave entitlement and leave policies which should be seen before one defines leave policy of your company. Leave policy of a company cannot be less than that mentioned by the State’s shop and establishment act.

3) if the Employee has quit or has been terminated, his earned leave balance should be paid to the employee and in case of death, to the nominee, within 2 days.

Any worker who has applied for leave and has not been granted the same, such refused leave shall be carried forward without any limit.

Leave can be calculated on Basic wages and DA.

Leave book & Leave Register to be maintained for each worker

Section 79 of factories act deals with leave entitlement is quoted below

"Section 79 in The Factories Act, 1948

79. Annual leave with wages.—

(1) Every worker who has worked for a period of 240 days or more in a factory during a calendar year shall be allowed during the subsequent calendar year, leave with wages for a number of days calculated at the rate of—

(i) if an adult, one day for every twenty days of work performed by him during the previous calendar year;

(ii) if a child, one day for every fifteen days of work performed by him during the previous calendar year. Explanation 1.—For the purpose of this sub-section—

(a) any days of lay off, by agreement or contract or as permissible under the standing orders;

(b) in the case of a female worker, maternity leave for any number of days not exceeding twelve weeks; and

(c) the leave earned in the year prior to that in which the leave is enjoyed, shall be deemed to be days on which the worker has worked in a factory for the purpose of computation of the period of 240 days or more, but he shall not earn leave for these days. Explanation 2.—The leave admissible under this sub-section shall be exclusive of all holidays whether occurring during or at either end of the period of leave.

(2) A worker whose service commences otherwise than on the first day of January shall be entitled to leave with wages at the rate laid down in clause (i) or, as the case may be, clause (ii) of sub-section (1) if he has worked for two-thirds of the total number of days in the remainder of the calendar year. 1[(3) If a worker is discharged or dismissed from service or quits his employment or is superannuated or dies while in service, during the course of the calendar year, he or his heir or nominee, as the case may be, shall be entitled to wages in lieu of the quantum of leave to which he was entitled immediately before his discharge, dismissal, quitting of employment, superannuation or death calculated at the rates specified in sub-section (1) even if he had not worked for the entire period specified in sub-section (1) or sub-section (2) making him eligible to avail of such leave, and such payment shall be made—

(i) where the worker is discharged or dismissed or quits employment, before the expiry of the second working day from the date of such discharge, dismissal or quitting; and

(ii) where the worker is superannuated or dies while in service, before the expiry of two months from the date of such superannuation or death.]

(4) In calculating leave under this section, fraction of leave of half a day or more shall be treated as one full day’s leave, and fraction of less than half a day shall be omitted.

(5) If a worker does not in any one calendar year take the whole of the leave allowed to him under sub-section (1) or sub-section (2), as the case may be, any leave not taken by him shall be added to the leave to be allowed to him in the succeeding calendar year: Provided that the total number of days of leave that may be carried forward to a succeeding year shall not exceed thirty in the case of an adult or forty in the case of a child: Provided further that a worker, who has applied for leave with wages but has not been given such leave in accordance with any scheme laid down in sub-sections (8) and (9) 2[or in contravention of sub-section (10)] shall be entitled to carry forward the 3[leave refused] without any limit.

(6) A worker may at any time apply in writing to the manager of a factory not less than fifteen days before the date on which he wishes his leave to begin, to take all the leave or any portion thereof allowable to him during the calendar year: Provided that the application shall be made not less than thirty days before the date on which the worker wishes his leave to begin, if he is employed in a public utility service as defined in clause (n) of section 2 of the Industrial Disputes Act, 1947 (14 of 1947): Provided further that the number of times in which leave may be taken during any year shall not exceed three.

(7) If a worker wants to avail himself of the leave with wages due to him to cover a period of illness, he shall be granted such leave even if the application for leave is not made within the time specified in sub-section (6); and in such a case wages as admissible under section 81 shall be paid not later than fifteen days, or in the case of a public utility service not later than thirty days from the date of the application for leave.

(8) For the purpose of ensuring the continuity of work, the occupier or manager of the factory, in agreement with the Works Committee of the factory constituted under section 3 of the Industrial Disputes Act, 1947 (14 of 1947), or a similar Committee constituted under any other Act or if there is no such Works Committee or a similar Committee in the factory, in agreement with the representatives of the workers therein chosen in the prescribed manner, may lodge with the Chief Inspector a scheme in writing whereby the grant of leave allowable under this section may be regulated.

(9) A scheme lodged under sub-section (8) shall be displayed at some conspicuous and convenient places in the factory and shall be in force for a period of twelve months from the date on which it comes into force, and may thereafter be renewed with or without modification for a further period of twelve months at a time, by the manager in agreement with the Works Committee or a similar Committee, or as the case may be, in agreement with the representatives of the workers as specified in sub-section (8), and a notice of renewal shall be sent to the Chief Inspector before it is renewed.

(10) An application for leave which does not contravene the provisions of sub-section (6) shall not be refused, unless refusal is in accordance with the scheme for the time being in operation under sub-sections (8) and (9).

(11) If the employment of a worker who is entitled to leave under sub-section (1) or sub-section (2), as the case may be, is terminated by the occupier before he has taken the entire leave to which he is entitled, or if having applied for and having not been granted such leave, the worker quits his employment, before he has taken the leave, the occupier of the factory shall pay him the amount payable under section 80 in respect of the leave not taken, and such payment shall be made, where the employment of the worker is terminated by the occupier, before the expiry of the second working day after such termination, and where a worker who quits his employment, on or before the next pay day.

(12) The unavailed leave of a worker shall not be taken into consideration in computing the period of any notice required to be given before discharge or dismissal."

LEAVE IN ESTABLISHMENTS COVERED UNDER THE FACTORIES ACT

Leaves as per Factories Act applies to all Management Staff, Executives, Supervisors, workers and contract workers as all of them fall under the definition of ‘worker’ under the Factories Act.

Type of Leave

Privileged / Earned

Casual

Sick

Maternity

Quantum per year

1 day leave for every 20 days worked in the previous year (Eg. 300 days worked = 15 days leave)

Nil

Nil

As per ESI Act OR Maternity Benefits Act

Entitlement

On working 240 days in the first previous year

NA

NA

NA

Utilization

To apply for leave 15 days prior. Leave not to be availed more than 3 times a year

NA

NA

NA

Carry Forward

Not more than 30 days

NA

NA

NA

Leave under shop and establishment act

Type of Leave

Privileged Leave/ Earned Leave

Casual Leave

Sick Leave

Maternity Leave

Quantum per year

30 after 12 months continuous employment

14 days

Nil

Provisions of Maternity Benefits Act, 1961 to apply

Entitlement

5 days after 3months employment on completion of of 60 days working in that period

During the year

Nil

Accumulation

90 days in 3 years

Not allowed

Not allowed

Annexation

No annexing of casual leave allowed with privileged leave. Suffixed or prefixed holidays and Sundays to the leave period shall not be accounted as leave. Holidays or Sundays falling between the period of leave shall be treated as leave

Under Factories Act: Annual Leave with Wages

A worker having worked for 240 days @ one day for every 20 days and for a child one day for working of 15 days.

Accumulation of leave for 30 days.

In India, the law prescribes 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.

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:

(a)Three national holidays of one whole day each on the 26th January, 15th August and 2nd October; and

(b) four other festival holidays.

On the 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.

Leaves for Factory Workers

Every worker who has worked in a factory for a period of 240 days or more in a year is entitled to leaves with wages in the subsequent year at the rate of one (1) leave for every twenty (20) days of work performed by him during the previous year. However, a non-adult person working is entitled to leaves at the rate of one (1) leave for every 15 days of work performed during the previous year.

It has been clarified that the above-mentioned leaves are exclusive of all other holidays whether occurring during or at end of period of leave.10 Therefore, any holidays occurring during, immediately before or after the period of leave under section 79(1) shall be excluded while counting the leaves a worker is entitled to.

A worker who was employed in the factory on the first day of January of a year and has worked for two third of the total number of days in a year, he shall be entitled to the leaves during the remainder of the calendar year.

Leaves for non-factory workers

Provisions similar to that of the Factories Act, 1948 have been adopted under the Shops and Establishment acts of various states in India. For example, Delhi Shops and Establishments Act, 1954 mandates that every person employed in an establishment is entitled to:

i. privilege leave for a period of not less than 15 days, after every twelve months of continuous employment; and

ii. casual or sick leave for a total period of not less than 12 days every year.

An employee becomes entitled to a minimum of 5 days of privilege leave for every four months of continuous employment and a minimum of 1 day casual leave upon completion of every month at work.

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.

Hello,

You should go through the labour laws and make rules in compliancewith the law.

Hope thos helps

Yes, this will not only help for for the growth of your business as well as you may not be put any litigation battle because of your actions been in compliance of law.

It is as per law of the centre, but do check as it may sometimes differ from the state to state.

Under Factories Act 12 working days annual/earned leave for all the workers who have worked at least 240 days in a year.

chapter VII under Chattisgarh shop establishment act provide for paid leave.

26. Employee's right for casual and privilege leave

(1) A person employed in an establishment to which this Act applies shall be entitled

(a) after every 12 month's continuous employment, to privilege leave for a total

period of one month; and

(b) in every year to casual leave for a total period not exceeding 14 days:

Provided that the leave under sub-clause (a) shall not at any time accumulate for a total

period exceeding 3 months:

Provided further that holidays under sections 13, 18 or 23 falling during the period of such

leave shall be included in the leave so granted:

Provided further that casual leave shall not be combined with privilege leave

(2) If any employee entitled to leave under sub-section (1) is discharged by his employer

before he has been allowed leave or if, having applied for and been refused the

leave, he quits his employment before he has been allowed the leave, the employer

shall pay him the amount payable under section 27 in respect of the leave.

(3) If any employee entitled to leave under sub-section (1) is refused the leave, he may

give intimation to the Inspector or any other officer authorised in this behalf by the

Government regarding such refusal. The Inspector shall enter such information in a

register kept in such form as may be prescribed.

Explanation — An employee shall be deemed to have completed a period of twelve

month's continuous service in an establishment notwithstanding any interruption in the

service during those twelve months brought about by sickness accident or authorised

leave not exceeding ninety days in the aggregate for all three or by a lockout or by a strike

which is not an illegal strike, or by intermittent periods of involuntary unemployment not

exceeding thirty days in the aggregate, and authorised leave shall be deemed not include

any weekly holiday allowed under this Act which occurs at the beginning or end of an

interruption brought about by the leave

https://www.labourlawsindia.in/files/resourcesmodule/5948beae07a99/[deleted]_2/CHHATTISGARH_SHOPS_AND_ESTABLISHMENT_ACT_1958.pdf

Further maternity benefit for all female workers for 26 weeks as provided under Maternity benifit act,1961 , further read with 2017 Maternity benefit amendment act.

http://www.ilo.org/dyn/travail/docs/678/maternitybenefitsact1961.pdf

https://labour.gov.in/sites/default/files/Maternity%20Benefit%20Amendment%20Act%2C2017%20.pdf

Further all state laws and notifcation in this regard can be timely checked to provide benfit.

Leaves can be broadly divided based on its applicability to establishments covered under the Factories Act and the Shops and Establishments Act. Leave is calculated for the calendar year January to December.

Shops and Establishments Act provides for provisions of leave for the employees. The said Act is framed by each State on its own and therefore would be different in its provisions.

Employee's right for casual and privilege leave

(1) A person employed in an establishment to which this Act applies shall be entitled

(a) after every 12 month's continuous employment, to privilege leave for a total

period of one month; and

(b) in every year to casual leave for a total period not exceeding 14 days:

Provided that the leave under sub-clause (a) shall not at any time accumulate for a total

period exceeding 3 months:

Provided further that holidays under sections 13, 18 or 23 falling during the period of such

leave shall be included in the leave so granted:

Provided further that casual leave shall not be combined with privilege leave

(2) If any employee entitled to leave under sub-section (1) is discharged by his employer

before he has been allowed leave or if, having applied for and been refused the

leave, he quits his employment before he has been allowed the leave, the employer

shall pay him the amount payable under section 27 in respect of the leave.

(3) If any employee entitled to leave under sub-section (1) is refused the leave, he may

give intimation to the Inspector or any other officer authorised in this behalf by the

Government regarding such refusal. The Inspector shall enter such information in a

register kept in such form as may be prescribed.

Explanation — An employee shall be deemed to have completed a period of twelve

month's continuous service in an establishment notwithstanding any interruption in the

service during those twelve months brought about by sickness accident or authorised

leave not exceeding ninety days in the aggregate for all three or by a lockout or by a strike

which is not an illegal strike, or by intermittent periods of involuntary unemployment not

exceeding thirty days in the aggregate, and authorised leave shall be deemed not include

any weekly holiday allowed under this Act which occurs at the beginning or end of an

interruption brought about by the leave.

The HR policy is already governed by all the said Acts . Even if the policy doesn't include the same the said Acts will be binding on the company.