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What are the multiple leave types and their entitlements as per the Labour Acts?

Introduction

Labour laws have been enacted to safeguard the interests of the employees and these required the employers to follow certain statutory rules and regulations.  These laws signify the relationship between the employer, the employee and the governments, both central and state.  The trade unions also play their part in framing these rules especially when it comes to implementing them in various organizations.  The Factories Act, 1948, the Shops and Establishment Act, and the Maternity Benefit Act, 1961 have set the policies for the types of leave that an employee can avail.

Some of these laws contain the provisions for different types of leave that the employees are entitled to take during their period of employment.  The applicability and duration of these leaves may slightly differ from state to state and from company to company.  However, in general the most common types of leave are Casual Leave, Earned Leave, Sick Leave, Maternity Leave and Compensatory off Leave.  A few other leaves like Paternity Leave, Marriage Leave, and Bereavement Leave are also available but these would depend upon the leave policies followed by the company and would, therefore, differ from company to company.  The implementation and applicability of the leaves types are detailed below.

Casual Leave

Casual is a leave that an employee can avail due to some urgent or unforeseen personal needs or circumstances.  Prior permission is required for this leave and any leave that is taken without permission would result in deduction of salary for that particular day.  The number of days that can be availed is decided by the company though most states have framed laws for providing such leave.  Normally the leave could range from 12 to 15 days in a year and would also depend on the type of industry.  In Tamilnadu the Casual leave entitlement is 12 days in a year.

Earned Leave

Earned Leave or Privilege Leave is a type of leave entitlement that an employee can avail when they complete one year of service.  Earned Leave is used for personal reasons such as in taking a vacation, or to conduct certain functions or festivals that are not declared holidays.  Earned Leave can be encashed, which means when you leave the company, you can encash the number of days of unutilized earned leave.  The value of one days earned leave is equal to one day’s Basic salary + DA.

Factory workers who have worked for a maximum of 240 days in a year are eligible for Earned Leave.  An adult worker is entitled to 1 days earned leave for every  20 days of work, whereas, children under 15 get 1 days earned leave for every 15 days worked. Employees involved in Sales or in the Newspaper industry is entitled to one month’s leave for every 11 months worked.

Since this type of leave is long and is normally planned for earlier, prior permission is required.  The administration has to be informed well in advance so that they can make alternate arrangements during the absence.  The unavailed earned leave balance is carried forward to the next year.  However, the number of days that can be carried forward may differ from state to state.  For example, in Tamilnadu, the maximum earned leave that can be carried forward is 45 days, whereas, in Kerala it is 24 days.

Sick Leave

Sick Leave can be availed by the employee when they fall sick.  The employee has to produce a medical certificate to avail this leave if the leave exceeds two or three days at a time. The normal entitlement is 12 days sick leave during a 12 month period.

Sick leave can be carried forward and in some cases it can be encashed at 50% of the basic salary for a day.  An apprentice is entitled to 15 days sick leave in a year whereas, and employee of t he Newspaper industry can avail one month sick leave for every 18 months work.

Maternity Leave

Maternity Leave is a benefit allowed to women employees under the Maternity benefit Act, 1961.  The Act ensures that women employees can avail the benefit of 26 weeks leave during the pre and post delivery period.  This is a paid leave and during this period the employee will be paid Basic salary + DA.  The women employee can opt for 8 weeks pre delivery leave and the balance post delivery leave.  This is applicable only for and 1st and 2nd delivery and a woman employee expecting a 3rd child is entitled for only 12 weeks maternity benefit.

A woman employee who adopts a child is entitled to 12 weeks maternity leave starting from the day of adoption.  This is applicable only when the adopted baby s below three months of age.  Similarly, a commissioning mother ( a biological mother who uses her egg to create an embryo implanted in a surrogate mother) will be entitled to Maternity benefit for a period of 12 weeks from the date the baby is handed over to the commissioning other.

A woman employee who has undergone Tubectomy during pregnancy can avail 2 weeks leave from the date of the Tubectomy procedure. For employees who undergo critical conditions like Pre-mature delivery, miscarriage and medical termination of pregnancy, one month’s maternity benefit is applicable.

Paternity Leave

Paternity Leave is a leave entitlement to expectant fathers after the child is born.  This again depends on the company’s leave policy.  The leave entitlement is for 2 to 4 weeks.  Though this leave is not mandatory, it is important that the HR’s understand the stress involved in bringing up a new born baby during the first few days and allow such leave to the expectant fathers.

Marriage Leave

Marriage Leave is not mandatory in India.  This would depend on the company’s leave policy.  Most companies tend to give 3 days’ marriage leave with the employee asked to provide documentary proof in the form of an invitation or a marriage certificate for its approval. An employee is eligible to only one Marriage Leave during the entire period of employment in the company.

Bereavement Leave

In the event of a death in the family, Bereavement Leave can be granted.  Though it is not mandatory, compassionate leave as it is also called can be granted to allow the grieving employee to participate in the last rites and take care of other personal issues.  Companies that are forward looking and care for their employees offer bereavement leave.

Compensatory Off leave

Employees who have worked for more hours than they are required to is entitled to Compensatory Off leave.  This happens when an employee has worked for more hours or has worked on a weekend of a holiday.  Compensatory Off has to be automatically recorded in the system and the employees must be informed that they can avail an extra day of leave for the extra time they have put in.  Compensatory Off has to be availed within an expiry period of 4 to 8 weeks, therefore, the employee has to utilize the compensatory off within period.

Loss of Pay or Leave without Pay

When an employee has availed all the leave that he or she is entitled to including the leave types like bereavement leave, marriage leave etc, and wishes to take leave, then he can take leave with a pay cut.  This is known as Loss of Pay leave or Leave without Pay.   Any leave availed over and above the leave entitlement as per the leave policy is considered as Loss of Pay leave.

An employee availing leave without prior intimation or not providing medical certificate for the sick leave availed would be treated as Loss of Pay leave.  Loss of Pay leave has to be properly tracked so that the salary deduction can take place for the number of days of Loss of Pay during that month.

Conclusion

Proper maintenance of the leave and attendance of employees is of paramount importance in an organization.  This operation is handled during the Payroll process and it is, therefore, imperative that the payroll process in maintained most efficiently and without any errors.  Manual processing using Excel worksheet and processing with a customized software may be successful when the workforce is small, but where the workforce is large the ideal option is to outsource the process to an experienced service provider

GetifyHR ranks among the top leave management service providers in India.  Our high-end, technology driven software is perfectly designed to address all aspects of leave management that include leave application, approval or rejection of leave, managing leave balances and leave analytics.  All the leave types like casual leave, earned leave, sick leave, maternity leave, paternity leave, marriage leave, compensatory off leave, loss of pay leave etc can be efficiently handled with our module.  This cloud-based package is easy to handle and will provide all the necessary reports at the click of a button.  Leave management has never been an easy task but with GetifyHR by your side this complex task gets overly simplified.

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