Startup - legal requirements and best practices for implementing sick leave policies

Greetings HR professionals,

As a start-up, we are seeking clarification on whether providing sick leave is mandatory for our company. Could anyone please advise on the legal requirements and best practices for implementing sick leave policies in our situation?

Dear Thriveni Venkatesh,

Does the Shops and Establishments Act or the Factories Act apply to your company? Please check the provisions of either act of the state where your company is registered. Earlier, there was not much variation; however, lately, the various states of India have incorporated amendments, and there are variations from one state to another.

Thanks,

Dinesh Divekar

Thank you so much, Mr. Dinesh Divekar, for the clarification. Currently, our company is governed by the Karnataka Shops and Establishments Act. Based in Bangalore, we recently transitioned from a proprietorship to a private limited company. Consequently, we have begun adhering to the policies and regulations outlined by the Karnataka Shops and Establishments Act. So we are unsure whether to provide Sick Leave to our employees.

Dear Thriveni Venkatesh,

If the provisions of the "Karnataka Shops and Commercial Establishments Act, 1961" apply to your company, then check the following link to refer to Section 15 of the said act:

https://indiankanoon.org/doc/159244130/#:~:text=%2D%20%5B(1)%20Every%20employee%20in,by%2 0him%2C%20in%20case%20of

Provision for sick leave, casual leave, bereavement leave, etc. is not there in the said act. There is only one type of leave, and it is "Leave with wages," and its entitlement is "one day for every twenty days work performed by him, in case of an adult."

Thanks,

Dinesh Divekar

Dear Ms. Thriveni,

I would like to bring to your attention Section 15(3) of the Act, which states:

"Every employee shall also be entitled during the first twelve months of continuous service and during every subsequent twelve months of such service in any establishment to leave with wages for a period not exceeding twelve days, on the ground of any sickness incurred or accident sustained by him or for any other reasonable cause."

This provision indicates that the employer is required to provide 12 days of leave for sickness or accidents.

Additionally, Mr. Divekar, I trust that your earlier observation was an oversight, and I believe it would be appropriate to reconsider your opinion in light of the correct legal interpretation.

Regards,
DaRaSri

Dear Srinivas24,

The Karnataka Commercial Establishments Act, 1961 does not compartmentalize leave into various types like earned leave, casual leave, sick leave, etc. There is a provision for "annual leave" which can be used irrespective of the purposes. I have downloaded the PDF copy of the said act and attached it to this post. You may refer to it.

Thanks,

Dinesh Divekar

Thank you so much, dear HR professionals @Dinesh Divekar and @DaRaSri.

Dinesh-ji,

Please refer to Section 15(3) on page 20 of the PDF you have attached. It states that "also be entitled" and goes on to discuss 12 days of leave for sickness. Therefore, there is earned leave under Section 15(1), Section 15(2) is deleted, and Section 15(3) pertains to sick leave.

In Karnataka, 12 days of sick leave for each 12-month period will be applicable, in addition to 1 day for every 20 days worked as earned leave.

Dinesh Ji,

Please refer to page 20 of your document.

I hope this clarifies your confusion.

I believe this topic doesn't warrant much discussion, as it is very basic.

I am done with it.

Please read the act twice, you will get the answer.