Under the Shop and Establishment Act applicable to IT companies, if an employee takes Leave Without Pay (LOP) with prior approval, will this period be considered as part of their continuous service?
From India, Chennai
From India, Chennai
Dear Leena,
Employees work to fulfil their domestic responsibilities and avail of to do so. However, sometimes their needs exceed their permissible leave quota for the year, even with accumulated leave. Against this backdrop, the companies create another type of leave: "Leave Without Pay" (LWP).
Even availing of LWP follows the same procedure, and since it is considered an authorised absence, it cannot be called a "break in service."
If the employee absconds from their duties or overstays their leave, it becomes an unauthorised absence. However, upon resuming their duties, the employee may request the regularisation of the absence. If the regularisation is approved, it cannot be called a "break in service."
For unauthorised absences, if the employee is awarded the punishment, then the companies consider it a "break in service."
These are my observations on how the companies define the "break in service."
Thanks,
Dinesh Divekar
From India, Bangalore
7884Employees work to fulfil their domestic responsibilities and avail of to do so. However, sometimes their needs exceed their permissible leave quota for the year, even with accumulated leave. Against this backdrop, the companies create another type of leave: "Leave Without Pay" (LWP).
Even availing of LWP follows the same procedure, and since it is considered an authorised absence, it cannot be called a "break in service."
If the employee absconds from their duties or overstays their leave, it becomes an unauthorised absence. However, upon resuming their duties, the employee may request the regularisation of the absence. If the regularisation is approved, it cannot be called a "break in service."
For unauthorised absences, if the employee is awarded the punishment, then the companies consider it a "break in service."
These are my observations on how the companies define the "break in service."
Thanks,
Dinesh Divekar
From India, Bangalore
Hi Leena
I got your question, I am sure you being in an IT company is already having registration under shops and establishment act.
Basis, your question:
1. YES IT companies are also covered under shops and establishment act.
2. if an employee takes Leave Without Pay (LOP) with prior approval, YES this period will be considered as part of his continuous service and you also have to pay gratuity to the employee as well accordingly (as applicable).
From India, New Delhi
I got your question, I am sure you being in an IT company is already having registration under shops and establishment act.
Basis, your question:
1. YES IT companies are also covered under shops and establishment act.
2. if an employee takes Leave Without Pay (LOP) with prior approval, YES this period will be considered as part of his continuous service and you also have to pay gratuity to the employee as well accordingly (as applicable).
From India, New Delhi
Under Shops & Commercial Establishment act, Factory act etc, any leave which is already approved by the organisation shall be treated as continuous of employment only
From India, Bangalore
From India, Bangalore
The query is answered presuming it's concerned about TN situations:
Both the questions are answered in affirmative.
1. Yes, IT & ITES business firms (other than those in which a manufacturing acitivity is carried on to be considered as a 'factory') have to be registered under the TN Shops & Establishments Act,1947 vide sec.
"(3) ‘commercial establishment´ means an establishment which is not a shop but which carries on the business of advertising, commission, forwarding or commercial agency, or which is a clerical department of a factory or industrial undertaking or which is an insurance company, joint stock company, bank, broker’s office or exchange and includes such other establishments as the State Government may by notification declare to be a commercial establishment for the purposes of this Act.
(6) ‘establishment´ means a shop. commercial establishment, restaurant, eating-house, residential hotel, theatre or any place of public amusement or entertainment and includes such establishment as the 1[State] Government may by notification declare to be an establishment for the purposes of this Act;"
(16) ‘shop´ means any premises where any trade or business is carried on or where services are rendered to customers and includes offices, store rooms, godowns and warehouses, whether in the same premises or otherwise, used in connection with such business but does not include a restaurant, eating-house or commercial establishment;"
For your Qn.2. The following provisions are stated in the act:
CHAPTER VI
HOLIDAYS WITH WAGES
"25.Holidays and sick leave--
(5) A person employed shall be deemed to have completed a period of twelve months’ continuous service within the meaning of this section, not withstanding any interruption in service during those twelve months brought about (i) by sickness, accident, or authorised leave (including authorised holidays) not exceeding ninety days in the aggregate for all three; or (ii) by a lock-out; (iii) by a strike which is not an illegal strike; or (iv) by intermittent periods of involuntary unemployment not exceeding thirty days in the aggregate and authorized leave shall be deemed not to include any weekly holiday or half-holiday allowed under this Act which occurs at the beginning or end of an interruption brought about by the leave."
I don't find very specific provision addressing your query except the above. The general understanding is when an approved leave is availed by an employee normally there won't be interruptions in the 'continuous service' of the concerned. Except in the circumstances when that approving authority for grant of leave mentions specially whether the 'break-in-service' consequent to the grant of LOP is approved & availed. Both the scenarios are possible i) with break and ii) without break. The stipulation is that it should be specified while communicating the approval of LOP. For e.g., LOP for higher studies, continued sickness, accident followed by coma state or mental state etc.
Practically, I have seen instances where an employee doesn't report for duty, go on applying for grant of LOP, in absentia and later after a while/years reports back for duty and apply for regularisation (using medical grounds or such other reasons for not applying for grant of leave (LOP as he/she exhausted EL/SL) in advance. On return a departmental inquiry was initiated and regularised, without-break-in-service. So it all depends on the precedents & stand of HOD, circumstances under which LOP are sought & approved.
Normally when LOP is approved as per extant rules/service conditions, 'continuous service' is not disturbed.
From India, Bangalore
Both the questions are answered in affirmative.
1. Yes, IT & ITES business firms (other than those in which a manufacturing acitivity is carried on to be considered as a 'factory') have to be registered under the TN Shops & Establishments Act,1947 vide sec.
"(3) ‘commercial establishment´ means an establishment which is not a shop but which carries on the business of advertising, commission, forwarding or commercial agency, or which is a clerical department of a factory or industrial undertaking or which is an insurance company, joint stock company, bank, broker’s office or exchange and includes such other establishments as the State Government may by notification declare to be a commercial establishment for the purposes of this Act.
(6) ‘establishment´ means a shop. commercial establishment, restaurant, eating-house, residential hotel, theatre or any place of public amusement or entertainment and includes such establishment as the 1[State] Government may by notification declare to be an establishment for the purposes of this Act;"
(16) ‘shop´ means any premises where any trade or business is carried on or where services are rendered to customers and includes offices, store rooms, godowns and warehouses, whether in the same premises or otherwise, used in connection with such business but does not include a restaurant, eating-house or commercial establishment;"
For your Qn.2. The following provisions are stated in the act:
CHAPTER VI
HOLIDAYS WITH WAGES
"25.Holidays and sick leave--
(5) A person employed shall be deemed to have completed a period of twelve months’ continuous service within the meaning of this section, not withstanding any interruption in service during those twelve months brought about (i) by sickness, accident, or authorised leave (including authorised holidays) not exceeding ninety days in the aggregate for all three; or (ii) by a lock-out; (iii) by a strike which is not an illegal strike; or (iv) by intermittent periods of involuntary unemployment not exceeding thirty days in the aggregate and authorized leave shall be deemed not to include any weekly holiday or half-holiday allowed under this Act which occurs at the beginning or end of an interruption brought about by the leave."
I don't find very specific provision addressing your query except the above. The general understanding is when an approved leave is availed by an employee normally there won't be interruptions in the 'continuous service' of the concerned. Except in the circumstances when that approving authority for grant of leave mentions specially whether the 'break-in-service' consequent to the grant of LOP is approved & availed. Both the scenarios are possible i) with break and ii) without break. The stipulation is that it should be specified while communicating the approval of LOP. For e.g., LOP for higher studies, continued sickness, accident followed by coma state or mental state etc.
Practically, I have seen instances where an employee doesn't report for duty, go on applying for grant of LOP, in absentia and later after a while/years reports back for duty and apply for regularisation (using medical grounds or such other reasons for not applying for grant of leave (LOP as he/she exhausted EL/SL) in advance. On return a departmental inquiry was initiated and regularised, without-break-in-service. So it all depends on the precedents & stand of HOD, circumstances under which LOP are sought & approved.
Normally when LOP is approved as per extant rules/service conditions, 'continuous service' is not disturbed.
From India, Bangalore
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