Leave Policy Drafting
Labour Law Compliance

The human resource department has to ensure that the provisions of several labour laws are implemented in the organisation and proper records and registers are maintained, apart from filing the labour law returns on time. The most common legislation requiring attention is the Minimum Wages Act, Shops & Establishment Act, Provident Fund Act, Employee State Insurance Act, Contract labour act etc.

The leave policy of an organisation is an internal document that governs the leave entitlement of the employees. However, it must be as per the Shops and Establishments Act as enacted or adopted by the respective state or union territory. The leave entitlement, its carry-forward, encashment, or earned leave, and the process of availing the leaves must conform to the provisions of the Shops and Establishments Act.

The leave policy of the company, LLP or any other private commercial establishment would be governed by the shops and establishment act.

CL stands for casual leave, and PL stands for privilege privilege leave; the leave entitlement differs from state to state. In some states, sick leave and casual leave are provided separately, while in others, the entitlement is combined leave. The privilege leave entitlement also differs from state to state.

The entitlement for casual leave differs from state to state. For example, in the NCT of Delhi, one day of casual leave is provided after the completion of every month of continuous employment. Similarly, in the state of Karnataka, one day of casual leave is given after every twenty days of work.

The leave policy of a private commercial establishment must be structured to meet the specific needs of the organisation while ensuring compliance with the Shops and Establishment Act and other laws such as the Maternity Benefit Act. The leave policy may give additional benefits to the employees, but it can't offer lesser entitlement than what is provided under the Shops and Establishment Act.

As such, the labour laws do not lay down a standard leave policy to be adopted by private commercial establishments; rather, they emphasise the legal entitlement of the employees. In other words, labour laws, such as the Shops and Establishment Act or the Maternity Benefit Act, provide for the minimum leaves that must be given to employees.