All About Leave Policy

In today’s world, maintaining your mental health is as important as working out at a gym. Having a cup of chai or planning for a “Leh” trip are no more considered as a subject of contempt. In fact, progressive companies offers frequent rest period, comfortable bean bags at office premises, office parties, libraries, office trips etc., to boost the productivity of the employee which in turn helps the organization to achieve their vision and mission.

For employees, taking leaves promotes good physical health, improves peoples work-life balance which reduces stress thereby increasing efficiency on a normal working day.

For employers, a happy enthusiastic employee would mean a better performance and effectiveness of the work. In India, Shops and establishment Act preserves and protects the rights of the employees. This act is regulated and enacted by the Labour department of the respective states.

In today’s video, we shall be understanding the types of leaves commonly used in India from perspective of an employee and the employer.

In India, the commonly used leaves are Earned leave, Casual leave, Sick leave, maternity leave, paternity leave etc. Unlike the usage of financial year, for the purpose of leave, generally, the companies use calendar year.

Earned Leave

This leave is also known as privilege leave or vacation leave or annual leave.
Employee’s perspective:
  • This leave can be availed for vacation, travel or any planned occasions. The fun fact is that a few companies are allowing the employees to work from remote place thereby enabling the employees to work and travel.
  • The minimum EL limit varies from state to state
  • In Karnataka, an employee is entitled to leave of 1 day for every 20 working days
  • Similarly, in Maharashtra, An employee can obtain 18 days for every 240 days worked.
  • If at the end of the calendar year, if there are any unused leave, they can be carried forward to the next year.
  • However, the carrying forward leaves cannot be more than 45 days (in Karnataka) in any
Employer’s perspective:
  • As an employer, it is important to restrict the consecutive leave availed by the employee so as to reduce disruption in the operations of the company.
  • Generally, these leaves are to be applied a week before and approved by the respective reporting managers to avoid any disturbance in the activities of the company.
  • These leaves can be granted at the beginning of every month, end of every month or fully at the beginning of the year. These leaves can be tracked on an excel or leave management software. An example has to be given by CASS.
  • At the end of the calendar year, the balance leave that must be carried forward must be computed. Leaves in excess of maximum carried forward limit has to be paid along with salary. This will help in budgeting the cash flow on account of LE.

Casual Leave

  • These leaves are to be used when there is an unforeseen/urgent personal requirements.
  • These are generally at par with sick leave.
  • Prior approval from the management is required.
  • Providing these leaves is mandatory in some states like Maharashtra where as in some states like Karnataka, granting casual leave is not a compulsion.

Sick Leave

Employee’s perspective:
  • These can be availed on the grounds of sickness or accidents.
  • Earned leave can be used in case of medical surgeries where the employee can plan and inform his respective managers, whereas sick leave cannot be used for holidays or vacation
  • Few companies require submission of medical certificate in case of prolonged leave
  • The unused sick leave cannot be carried forward to the next year nor encashed at the end of the year
  • In Karnataka, an employee is entitled to 12 sick leaves during the year
  • A few states offering casual leave doesn’t not mandate the sick leaves
Employer’s perspective:
  • It is of paramount importance to ensure that the employees do not use sick leave in the place of earned leave.
  • For this purpose, the companies usually restricts availing of consecutive sick leaves without medical certificate
  • The casual leave and sick leave can be combined in the states where they are allowed

Maternity Leave

  • Employers must provide 26 weeks of paid leave to any woman who has worked for atleast 80 days in the 12 months preceding the expected delivery date.
  • An employee can avail not more than eight weeks before delivery and the leave after the due date cannot exceed the total weeks granted
  • The leaves are available upto two births. For the birth of the third child, an employee is entitled to only 12 weeks.
  • In case of adoption or surrogacy or a commissioning mother, leave is restricted to 12 weeks.
  • Employers having at least 50 employees will be required to provide creche facility either individually or as a shared common facility. The employer shall also be required to allow four visits a day to the creche including the interval for rest allowed to her.
  • During the pandemic hit situation, with many daycare and crèche shut, many companies provided frequent rests and breaks to enable the employee to take care of their children.
  • Employers may allow Eligible Employees to work from home on a case to case basis depending on the nature of work. The conditions governing such work from home may be mutually agreed between the employer and the employee.
  • An eligible employee is entitled to a one time medical bonus of Rs, 3,500/-.

Paternity Leave

  • This is a leave meant for the father to take care of the new born baby and the mother.
  • There is no requirement from the labour department to provide this type of leave.
  • However, progressive companies offer 2 days to 4 weeks of leave. For eg: Flipkart allows 10 days of paternity leave plus partial work from home policy during the first three months after the birth of the child.

Bereavement Leave

  • Bereavement leave or compassionate leave is a paid time-off category that employees can use following the death of a close friend or family member
  • Though this leave is not mandatory in S&E Act, a few companies like TCS, Infosys, Cipla etc offer bereavement leave.

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