Confusion In Leave Policy

Hi All,

First of all I am sorry to ask such a common and vastly discussed topic. No doubt, I have read theoretical part of Factories Act 1948, but now as I am working (as a Fresher) in a manufacturing sector, it has become quite confusing for me to apply the learned knowledge practically.

Acc. to Factories Act 1948, "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 :-

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

if a child, one day for every fifteen days of work performed by him during the previous calendar year."

1) Here 240 days are to be counted from beginning of the calendar year? i.e. from January to December? And if worker has joined company from October, then how to count and calculate the 240 days? If he/she has joined in October, then it would be said that he has worked for only 90 days in the previous year. Then how do we calculate Earned Leaves for him in the subsequent year?

2) And is there any minimum no. of Earned Leaves given for which an employee is eligible after meeting the criteria of working for min. 240 days in the previous year?

3) My last question is that do we need to consider the 20 days rule only after the employee completes the 240 days criteria or the 20 days rule is a part of (inclusive) that 240 days period?

I know what I have asked above might be confusing, but that is because I am confused.

Dear All,
Please advice me if an employee works for 20 days in a month, and a company provides 2.5 EL in a month, than how many leaves he can avail in that month. Is there has any specified formula or, any law.
ANURAG BHARGAV

Dear Harshavardhan,
1. Calendar Year means Starting from 1st Jan to 31st Dec.
2. If employees joins in Oct, then calculations are to be made on pro-rata basis.
3. 240 days working in a year is to ensure regularity in employment which includes authorised leave etc.
4. EL are to be calculated while dividing working days by 20. Working days are inclusive of working days, weekly off, National & Festival Holidays, casual Leave but not earned leave.
Thanks
V K Gupta

Dear Gupta VK
EL are to be calculated while dividing working days by 20. Working days are inclusive of working days, weekly off, National & Festival Holidays, casual Leave but not earned leave.
Sir,
If i am not wrong that here meaning of working days, Only actual worked days, i.e. for calculation of Earned Leave we take only actual working days (No. of days of worked performed)

Dear,
Weekly off, National & Festival Holidays, casual Leave are part of the working days and these are to be counted.
OK
V K Gupta

Dear Sir,

I am saying only for computing for Earned Leave on the base of Factory Act, 1948.

Maternity Leave & Lay Off will be taken for computing of 240 days limitations.

Annual leave with wages.

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.

Thanks &

Regards

Mohan

Dear Harsh,

Many learned readers have given you many valid suggestions. I would like to give below mine, which might be helpful through my personal experience and workings.

1. The condition of 240 days is applicable for the employees who are on the roll as on 1st January and up to 31st Dec. in a Calender year. In case of the employees who join in between, their leave is calculated on prorata basis by taking their attendance to be not less than 2/3rd of the available working days after he joins the Orgn. If his attendance falls short of 2/3rd, he is not entitled for any EL for that year. One thing must be kept in mind that the leave earned for previous year is credited on 1st January next year.

2. While taking into account 240 days, if attendance of an employee, who is on roll for the whole calender year, falls short of 240 days, the authorized leave i.e. EL, Sick/Medical Leave, Paid National holidays, Casual Leave, Maternity Leave(in case of female employees), special injury leave(for injury arising during the course of employment), etc. are also added to the actual attendance. If the sum total comes to 240 or above, the employees is entitled to EL for that year, BUT the leave will be calculated for actual physical attendance only. For example : Actual Attendance = 192, Authorized leave = 56, Total = 248, thus the employee though falling short of 240 days, but qualifies for EL Calculation on 192 days. He will be entitled for 192/20 = 9.6 or 10 days (rounded off) EL.

3. Weekly off, for which the employee has not worked, will not be taken into account.

Hope this will help.

Best wishes.

AK Jain

HR Personnel,

NCL/CIL

Strictly going as per factories act, anyone joining in oct will not be eligible for paid leave in the next Callander year. Because he will not have completed 240 days in thecalander year. Most companies give proportionate leave to be fair. But it is not required by law.
In counting working days, days if earned leaves to be included. They are a part of working days for the employee. Rest of your points are completely in line with my understanding of the act

Dear Saswatabanerjee

I do not agree with your following views:"Strictly going as per factories act, anyone joining in oct will not be eligible for paid leave in the next Calender year. Because he will not have completed 240 days in the calender year. Most companies give proportionate leave to be fair. But it is not required by law."

Section 79(2) of Factory Act says that if a persons joins other than 1st Jan, then he is entitled to leave provided his working during the remainder calendar year is 2/3 days during that period. Similarly, if an employees leaves during the calendar year, he is entitled to EL as per his working upto his exit date. You may refer to Section 79(2) & 79(3) in this regard and reproduced below:

"(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 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.

(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 the discharge, dismissal, quitting of employment, superannuating or death calculated at the rates specified in sub-section (1),even if he had not worked for the entire period specified i sub- section(1) or sub-section(2) making him eligible to avail of such leave, and such payment shall be made-

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

where the worker is superannuated or dies while in service, before the expiry of two months from the date of such superannuating or death."

I hope I am able to clarify you.

Thanks

V K Gupta