Updated : September 12, 2024A Guide to Leave in Private Commercial Establishments NCT of Delhi
Overview : This article discusses the regulations governing various types of leave for the employees of private commercial establishments operating in the National Capital Territory of Delhi as prescribed under the Delhi Shops and Establishments Act, 1954. We have discussed the entitlements of various leave types, including sick, casual, and earned leave for shops and commercial establishments.
Meaning of Leave
Leave means to take leave of absence from attending the work with the permission of the employer, which may be paid leave or leave without pay. Unless leave sought is granted, the employee seeking leave can’t be absent from duty. In this case, if the employee prefers to take leave, it will be considered unauthorised, which may lead to dismissal as per the employment contract both employee and employer agreed upon. Leave can be of various types, and the provisions of the applicable Shops & Establishment Act for private sector employees govern the same.
Approval Necessary For Leave?
Leave is an absence from work with permission and requires individual application and approval. Even when the employee has a leave balance to his credit, he should not proceed with leave without obtaining prior approval from management. The human resource policy should provide for the method of making an application for leave, which should always comply with the rules framed by the state government under the Shops & Establishment Act.
Leave Provisions for Private Sector Employees in Delhi
The Delhi Shops and Establishments Act 1954, provides employees with a specific number of leave days per year in addition to public holidays that may apply. The Act has categorised leave into three types: Earned or Privilege, Sick, and Casual Leave. Therefore, the leave policy of all the shops and establishments in Delhi must comply with the provisions of its Shops and Establishments Act. Here’s a detailed overview of the leave provisions.
Table Of Leaves in NCT of Delhi
| S.No | Particulars | Entitlement |
|---|---|---|
| 1. | Earned or Privilege Leave (EL) | 5 Days of EL for every four completed months of continuous employment (A total of 15 days of EL Per year)
|
| 2. | Sick or Casual Leave (SL/CL) Sick Leave and Casual Leave are combined into a single entitlement referred to as "sickness or casual leave." | 1 Day every month after a continuous employment of one month (Total of 12 days of SL/CL Per year)
|
Leave Entitlement on Probation Period
The act does not differentiate employees based on their employment status, such as probationary or confirmed employees. Leave entitlements are applied equally to all employees from the date of their employment. Employers can make different leave policies for probationary or confirmed employees; however, they must ensure annual sickness and casual leave is at least twelve. They should also ensure five privileges leave for every four completed months and fifteen for every completed year.
Pro-Rata Leave Entitlement for Mid-Month Joinees
The Delhi Shops and Establishment Act, 1954, does not explicitly provide for the pro rata calculation of leaves for employees who join employment in the middle of the month. However, in practice, the pro-rata calculation for the privilege leave or earned leave accrual within those 4-month blocks is the fairest approach, ensuring that the total entitlement for each completed four-month block is not less than five days and not less than fifteen days for the completed year. The Sick Leave or Casual Leave is not subject to pro rata entitlement, and one SL/CL must be given after the completion of every calendar month.
Carry Forward of Unused Leave
Earned Leave (also termed as Annual Leave or Privilege Leave) can be carried forward up to a maximum of three times the annual entitlement, allowing a maximum carry-forward of 45 days. Sickness or Casual Leave can not be carried forward. Any unused leave beyond this limit may lapse; however, it is subject to the provisions of the employment contract or the company policy.
Encashment of Unused Leave
Section 22(2) of the Delhi Shops and Establishments Act addresses the payment of wages (Encashment) in place of unutilised balance of privilege leave (also known as earned leave) in specific scenarios. When the employer terminates an employee or when the employee resigns as a subsequent act after their application for privilege leave is refused. The Act does not explicitly mention the encashment of sickness or casual leave, and it remains silent on whether these can be encashed. The encashment of unutilised privilege leave may be subject to company policy or employment contracts, even in situations not explicitly covered by the Act.
Earned Leave Encashment on Retirement
The Delhi Shops and Establishments Act, 1954, does not explicitly mention provisions for earned leave encashment at the time of retirement. In such cases, the terms of the employee’s contract or the company’s policy should be referred for determining the entitlement to leave encashment on retirement.
Maternity Leave: The Maternity Benefits Act, 1961, as amended in 2017, is a central government legislation and applies to establishments across the country, including Karnataka. For the first and second child, the female employee is entitled to 26 weeks (6 months) of paid maternity leave. However, for the subsequent children, the maternity leave is 12 weeks (3 months). In cases of miscarriage, the female employees are entitled to a paid leave of six weeks on the production of such proof as may be prescribed.
Conclusion
A comprehensive policy is necessary for the organisation to act as a reference material for all employees and the HR team while administering the leave policy. Setindiabiz offers its specialised drafting assistance in formulating a comprehensive leave policy for the company that is thorough, fair, and compliant with local and state regulations.
