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This article is written by Asgar Ali, pursuing a Diploma in Industrial and Labour Laws from Here he discusses “Leave Related Provisions In Shops and Establishments Vs. Standing Orders Rules”.

At every workplace, for bringing Safe, Healthy and productive work culture a standard Leave and Attendance policy play an important and beneficial role. Such Leave policy should be designed keeping in view business need, socio-economical requirements and most importantly the compliance fulfilment of all applicable statutory norms i.e. Factories Act 1948, applicable state factory rules, shop and establishments acts and standing order rules applicable to that industry or establishment in Industrial employment and labour laws context. This Context shall go wider in near future after the enforcement of provisions of new labour codes in India which shall be helpful in bringing transparency in leave related provisions vested into Industrial relation statutes, safety and labour welfare matters in our Indian Industrial employment and labour laws context.

The Industrial Employment (Standing Orders) Act, 1946, obliges the employer to define and issue the uniform working conditions of employment in his Industrial establishment in case of 100 or more than hundred workers are employed on any day of the previous year. A model or certified standing order is more important than HR Policies and procedures of an organization. Though, in standing order, there are many matters of disciplines and uniform conditions at every type of industry like Entrance and Leaving, working Hours, wage rate, Shift schedules, Misconduct provisions, process of Inquiry, investigation, termination, separation etc., but in this article, specific to standing order rules, Shop and Establishment Acts, the matter related to Attendance and Leave provisions have been mentioned.  

In compliance of a certified and Model standing order, The Leave related provisions are covered into leave and attendance policy of any organisation to which the employees and workmen of that organisation are agreed to comply this policy likewise all other internal policies of that organisation. Such things are specifically mentioned into employment agreements of all employees and workmen under the clause of “Leave policy” or any other similar names. In such clauses, it is clearly mentioned that how many leaves one would be entitled to take in a certain time period. 

Leaves and Holidays related Provisions as per Indian Employment and Labour Laws  

The matters related to Holidays and Leaves of employees and workers working in any organisation in India are predominantly governed by the Factories Act, 1948 and shops and establishment acts applicable state wise. Leaves and Holidays related provisions can be categorised into following sub-sections: 

  1. Provisions of Leaves and Holidays to Factory Workers 
  2. Provisions of Leaves and Holidays to Non- Factory Workers 
  3. Provisions of Leaves Carry Forward and its Yearly Encashment
  4. Provisions of compensatory or extra leaves 
  5. Weekend Holidays
  6. National Holidays  
  7. Other Provisions of Leaves 

Provisions of Leaves and Holidays to Factory Workers: 

A Worker as per Factories Act is defined as any person who is employed, directly or indirectly through contractor (or manpower supply agency), with or without brought into knowledge of principal employer which may be with or without remuneration in any process of manufacturing, any cleaning work of machines, manufacturing premises, allied work activities of manufacturing process. Hence, the implied meaning of worker as per the Factories Act, 1948 covers its employees also. 

The Factories Act says that every worker who has been worked in any factory up to or above the period of 240 working days is eligible to take leaves with his wages in the succeeding year @ one leave for every twenty man-days worked by him during the preceding year. In case of a non-adult person, he shall be eligible to take leaves with his wages in the succeeding year @ one leave for every fifteen (15) man-days worked by him during the previous year.

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So it can be said that any worker who has been employed or worked in a factory on the first day of January of a Calendar year and has been worked for two-third of the total number of days in a year then he shall be eligible for the leaves during the rest of that calendar year.

Provisions of Leaves and Holidays to Non-Factory Workers (Shops and Establishments Act)

Likewise, the Factories Act, 1948, similar provisions have been adopted under the various Shops and Establishment acts applicable in different states of India. 

For instance, the following provisions are given to any person employed in an establishment situated in Delhi related to his leaves provisions as per Delhi Shops and Establishments Act, 1954, which mandates:

  1. 15 Nos. Privilege leave (PL) after every 12 working months i.e. any worker is entitled to gain at least 5 days of privilege leave (PL) for every 04 months of his continuous employment.
  2. 12 Nos. Casual Leaves (CL) and Sick Leave (SL) every year – means any worker is entitled to gain at least 01 days of casual Leave (CL) for every working month of his continuous employment.

Provisions of Leaves Carry Forward and its Yearly Encashment ( for Factory workers as well as Non – Factory workers) 

A worker in any establishment/organisation is allowed to carry forward his leaves to the next year in case the worker is availing the whole of the leaves permissible to him. Though, such carry forward of accrued holidays is constrained to maximum thirty days in case of an adult worker and forty days in case of a non-adult worker. The employer sometimes interprets Section 80 of the Factories Act by different ways as per their nature of work adding dearness allowance or cash equivalent of regular remunerations such as concessional food or other articles, So it varies from one organisation to another due to its nature of work.

In fact, the leaves related matters are directly linked to the business, working culture and vision of an organisation, that’s why now most of the multinational companies in India are promoting leave earning by extra work hours, carry forward and encashment so that their business working might not get interrupted. Hence, leave encashment policy is considered as an important part of HR (Human Resource) Policies and procedure manuals and accordingly, it helps in framing the employment contract of a worker in an organization. 

Similarly, a non-factory worker is also entitled to take benefit of carrying forwarding his leaves as per the relevant provisions mentioned in most of shops and establishment acts of their respective states. For Example, in Delhi, an employee of an establishment ( a non-factory worker) is entitled to carry forward his accrued PL (privilege leaves) to the next year subjected to a maximum of 3 times the period of PL (privilege leaves) to which he is allowed after every 12 months’  employment. However, casual leaves may not be carried forward in this context. 

Provisions of compensatory or extra leaves  

Every worker at any establishment/organisation is entitled to get compensatory leaves in lieu of working extra at any day of Weekly off or Holiday declared by that organisation as needed by that organisation. There is a provision of encashment of these leaves in case such clause is mentioned in the model standing order of that company. 

Basic wages in lieu of compensatory leaves are also to be given in case of worker is discharged, dismissed or his employment is superannuated or the separation from the company in terms of resignation as the case may be. There are strict deadlines for making reimbursement of wages of such workers in lieu of their leaves as per provisions of Factories Act, 1948.

Also, similar to the provisions as per the Factories Act, 1948 an employee is entitled to encashment of privilege leave during the time of his job separation. Though, that employee shall not be entitled to encash the casual leaves he had at that time. Casual leaves may get lapsed in such conditions.

Weekend Holidays

In our country India, in accordance to the provisions mention as per the Factories Act, 1948, the law advocates a maximum number of hours within a week where a worker cannot be employed beyond its permissible limit. An adult worker is not allowed to work for more than 48 hours a week and not more than 9 hours in a working day. As per the Factories Act, Weekly holiday is obligatory. Sunday- like a first day of the week shall be observed as a weekly holiday. It is obligatory for the employer to make sure that no worker works more than Ten (10) days without a rest day of Twenty four (24) hours. Hence, if any worker is asked to work on weekly holiday, he shall be given a full holiday on one of three immediate days or after the normal day of coming holiday as the case may be. Consequently, the weekly holiday that is one full day as holiday in every week may get changed from Sunday to any other days of a week by complying the procedure laid down under Section 52 of the Factories Act, 1948, which obliges the employer to deliver a notice to the local labour inspector before making such changes in the weekly holidays in his organization duly mentioning the appropriate reasons.
Similar provisions of Leaves are agreeable under the shops and establishment acts of respective states in India. 

National Holidays  

In India, Every State Government has the authority to declare National, Festival and any other mandatory holidays for industrial establishments under the provisions of their respective Industrial Establishment Acts, State factory rules. Several states have passed their own laws for National and Festival Holidays. For Example, The Orissa Industrial Establishments (National and Festival) Holidays Act, 1969 necessitates employees working on specific days to be paid double of wages rate or double overtime rate. The workers can also choose to get normal wages and a compensatory off on another day. 

The similar provision of Leaves on National Holidays is also applicable for Non- factory Workers i.e. workers employed under shops and establishment acts of various states  

For Example, In Delhi, The Punjab Industrial Establishment (National and Festival Holidays and Casual and Sick Leave) Act, 1965 is applicable where every worker is entitled to avail succeeding mandatory holidays which are as “Three National Holidays of one whole day each falling on every 26th January, 15th August and 2nd October” in a calendar year.

Other Provisions of Leaves 

  • Maternity Leaves

The Maternity Benefits Act, 1961 was ratified with respect to the employment of pregnant women in any establishments. Such leaves are entitled to both types of Female workers i.e. Factory Workers as well as Non- Factory Workers.  

With recent amendments made to the Maternity Benefits Act, 1961, now the paid maternity leave has been extended from 12 weeks (84 days) to 26 weeks(182 days) for women working in an organisation. Such employees are also allowed to one additional month of paid maternity leaves in case of complications arising during or due to pregnancy, delivery of a child, miscarriage, premature birth, and critical health issues to newborn baby and mother, any medical surgery or operation related to maternity matters  

  • Paternity Leaves

In India, there are certain provisions for employees working in the government sector to gain benefits of Paternity Leaves. In the Year 1999, the Central Government made provisions for paternity leaves by gazette notification under Central Civil Services ( Leave) Rules 551(A) which is applicable to a male Central Government employee (it also includes an apprentice and a probationer employee )with less than two surviving children. Under these provisions, such employee can take 15 days leaves in order to take care of his family within 6 months from the date of birth of a new baby. 

But, as on date, there is no such law prevails over private-sector employees and it depends upon the desecration of employers whether they have added provisions of Paternity Leaves for their employees. There are many multinational companies like Infosys, Facebook, TCS and Microsoft etc. who have added provisions of Paternity Leaves in their Leave policies. In major countries like Norway, Sweden, Iceland and Spain, there is a statutory provision of granting paternity leaves to working people.   

In September 2017, Shri Rajeev Satav introduced a bill titled as Paternity Benefit Bill, 2017 in parliament house with an aim to provide paternity benefits to a natural parent, adoptive parent or any person who is acting in loco parentis to the relevant child. Hope this bill shall become law in the near future so that paternity rights of working people can be protected.   


Leaves, weekends and Holidays re-energize us. Every working person has the right to take leaves during his employment in any organisation from top to bottom whether it is a factory, corporate office, shop, mall, cinema hall, Media industry, circus or any of the workplace where he is earning his livelihood. The Indian labour laws empower every working person to take leaves and holidays on festival occasions, public holidays and if he performs his duty on these days then he shall be paid more than normal working days. Leaves are one of the “Basic Needs” of every working person and helpful to remove his physical, psychological stresses and gives him pleasure. 

Aristotle says that pleasure in the job puts perfection in the work. For bringing perfection, and most importantly pleasure, the Leave policies must be good.

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