Hi All,
First of all, I am sorry to ask such a common and vastly discussed topic. No doubt, I have read the theoretical part of the 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.
According to the 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, are the 240 days to be counted from the beginning of the calendar year? i.e., from January to December? If a worker has joined the company in October, then how do we 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) Is there any minimum number of Earned Leaves given for which an employee is eligible after meeting the criteria of working for a minimum of 240 days in the previous year?
3) My last question is, do we need to consider the 20 days rule only after the employee completes the 240 days criteria, or is the 20 days rule 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.
From India, Ahmadabad
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13First of all, I am sorry to ask such a common and vastly discussed topic. No doubt, I have read the theoretical part of the 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.
According to the 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, are the 240 days to be counted from the beginning of the calendar year? i.e., from January to December? If a worker has joined the company in October, then how do we 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) Is there any minimum number of Earned Leaves given for which an employee is eligible after meeting the criteria of working for a minimum of 240 days in the previous year?
3) My last question is, do we need to consider the 20 days rule only after the employee completes the 240 days criteria, or is the 20 days rule 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.
From India, Ahmadabad
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Dear All,
Please advise me if an employee works for 20 days in a month, and a company provides 2.5 EL in a month, then how many leaves can he avail in that month? Is there any specified formula or law?
ANURAG BHARGAV
From India, New Delhi
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Please advise me if an employee works for 20 days in a month, and a company provides 2.5 EL in a month, then how many leaves can he avail in that month? Is there any specified formula or law?
ANURAG BHARGAV
From India, New Delhi
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Dear Harshavardhan,
Calendar year means starting from 1st Jan to 31st Dec. If employees join in Oct, then calculations are to be made on a pro-rata basis. 240 days working in a year are to ensure regularity in employment, which includes authorized leave, etc. Earned leave is to be calculated while dividing working days by 20. Working days include working days, weekly off, national and festival holidays, casual leave, but not earned leave.
Thanks,
V K Gupta
From India, Panipat
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Calendar year means starting from 1st Jan to 31st Dec. If employees join in Oct, then calculations are to be made on a pro-rata basis. 240 days working in a year are to ensure regularity in employment, which includes authorized leave, etc. Earned leave is to be calculated while dividing working days by 20. Working days include working days, weekly off, national and festival holidays, casual leave, but not earned leave.
Thanks,
V K Gupta
From India, Panipat
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Dear Gupta VK,
EL is to be calculated by dividing working days by 20. Working days include working days, weekly off, National & Festival Holidays, and casual leave, but not earned leave.
Sir,
If I am not mistaken, the meaning of working days here refers to only actual worked days. That is, for the calculation of Earned Leave, we consider only the actual working days (number of days work performed).
Thank you.
From India, New Delhi
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EL is to be calculated by dividing working days by 20. Working days include working days, weekly off, National & Festival Holidays, and casual leave, but not earned leave.
Sir,
If I am not mistaken, the meaning of working days here refers to only actual worked days. That is, for the calculation of Earned Leave, we consider only the actual working days (number of days work performed).
Thank you.
From India, New Delhi
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Dear, Weekly off, National & Festival Holidays, casual Leave are part of the working days and these are to be counted. OK V K Gupta
From India, Panipat
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From India, Panipat
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Dear Sir,
I am writing to inquire about computing Earned Leave based on the Factory Act, 1948.
Maternity Leave and Lay Off will be considered for computing the 240-day limitation.
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
From India, New Delhi
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I am writing to inquire about computing Earned Leave based on the Factory Act, 1948.
Maternity Leave and Lay Off will be considered for computing the 240-day limitation.
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
From India, New Delhi
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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 Calendar year. In case of the employees who join in between, their leave is calculated on a pro-rata basis by taking their attendance to be not less than 2/3 of the available working days after they join the organization. If their attendance falls short of 2/3, they are not entitled to any EL for that year. One thing must be kept in mind that the leave earned for the previous year is credited on 1st January the next year.
2. While taking into account 240 days, if the attendance of an employee, who is on the roll for the whole calendar year, falls short of 240 days, the authorized leave (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.) is also added to the actual attendance. If the sum total comes to 240 or above, the employee 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 Calculations on 192 days. He will be entitled to 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
From India, New+Delhi
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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 Calendar year. In case of the employees who join in between, their leave is calculated on a pro-rata basis by taking their attendance to be not less than 2/3 of the available working days after they join the organization. If their attendance falls short of 2/3, they are not entitled to any EL for that year. One thing must be kept in mind that the leave earned for the previous year is credited on 1st January the next year.
2. While taking into account 240 days, if the attendance of an employee, who is on the roll for the whole calendar year, falls short of 240 days, the authorized leave (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.) is also added to the actual attendance. If the sum total comes to 240 or above, the employee 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 Calculations on 192 days. He will be entitled to 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
From India, New+Delhi
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Strictly going by the Factories Act, anyone joining in October will not be eligible for paid leave in the next calendar year because they will not have completed 240 days in the calendar year. Most companies give proportionate leave to be fair, but it is not required by law. In counting working days, days of earned leave should be included as they are a part of the working days for the employee. The rest of your points are completely in line with my understanding of the act.
From India, Mumbai
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From India, Mumbai
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Dear Saswata Banerjee,
I do not agree with your following views: "Strictly going as per the Factories Act, anyone joining in October will not be eligible for paid leave in the next calendar year because he will not have completed 240 days in the calendar year. Most companies give proportionate leave to be fair, but it is not required by law."
Section 79(2) of the Factory Act says that if a person joins other than on 1st Jan, then he is entitled to leave provided his working during the remainder of the calendar year is 2/3 days during that period. Similarly, if an employee leaves during the calendar year, he is entitled to earned leave as per his working up to his exit date. You may refer to Section 79(2) & 79(3) in this regard, 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 subsection (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, quits his employment, is superannuated, or dies while in service during the course of the calendar year, he or his heir or nominee 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, superannuation, or death calculated at the rates specified in subsection (1), even if he had not worked for the entire period specified in subsection (1) or subsection (2) making him eligible to avail of such leave. Such payment shall be made:
- where the worker is discharged, 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 superannuation or death."
I hope I am able to clarify for you.
Thanks,
V K Gupta
From India, Panipat
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I do not agree with your following views: "Strictly going as per the Factories Act, anyone joining in October will not be eligible for paid leave in the next calendar year because he will not have completed 240 days in the calendar year. Most companies give proportionate leave to be fair, but it is not required by law."
Section 79(2) of the Factory Act says that if a person joins other than on 1st Jan, then he is entitled to leave provided his working during the remainder of the calendar year is 2/3 days during that period. Similarly, if an employee leaves during the calendar year, he is entitled to earned leave as per his working up to his exit date. You may refer to Section 79(2) & 79(3) in this regard, 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 subsection (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, quits his employment, is superannuated, or dies while in service during the course of the calendar year, he or his heir or nominee 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, superannuation, or death calculated at the rates specified in subsection (1), even if he had not worked for the entire period specified in subsection (1) or subsection (2) making him eligible to avail of such leave. Such payment shall be made:
- where the worker is discharged, 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 superannuation or death."
I hope I am able to clarify for you.
Thanks,
V K Gupta
From India, Panipat
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