As per the Factory Act, a worker is eligible for Earned Leaves after completion of 240 working days. They will be paid 12 EL for the 240 working days. However, there is some confusion regarding the definition of working days. Some individuals believe that working days include Sundays and holidays, while in reality, working days refer to days excluding Sundays and holidays. Some professionals suggest that 18 leaves should be paid in a year (365/15 = 18). Nevertheless, based on the actual working days in a year, which are around 300 to 302, only 15 EL should be paid. Please clarify this discrepancy.
From United States, Cambridge
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From United States, Cambridge
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Let us see what the Factories Act says.
There are two important clauses. One relates to eligibility, and the other one relates to the calculation of the number of leaves to which the employee is entitled.
Eligibility: An employee is eligible for leave (Earned leave or annual leave with wages as it is called in the Act) only if he has worked for 240 days. One who has joined during the year will be eligible to get earned leave in the current year if he has worked for 120 days in the six-month period or simply 20 days in a month.
For deciding the eligibility, all PAID DAYS should be taken into account. That is, this 240 days are inclusive of all weekly off days, holidays, and leave days for which the employee was paid wages/salary. The days an employee remained absent or on leave under ESI, due to employment injury, accidents, or occupational diseases should also be considered as days worked for the purpose of eligibility. Similarly, the days an employee was given lay off shall also be counted as working days.
For example, suppose a person had physically worked for 150 days in the preceding calendar year (2022). He had taken 10 days of earned leave during 2022. He had met with an accident while on duty and was on leave for another 8 days. On account of the shortage of materials, he was given lay off for 10 days in 2022. He was paid weekly off wages for 52 days and had enjoyed 10 days of holidays in 2022.
Now, he will be eligible for earned leave in 2023 because he satisfies the eligibility condition. Though he had come to the factory for only 150 days, he was paid for 222 days (52 weekly off, 10 holidays, 10 days earned leaves which he should have earned from the last year). He was paid by the ESIC for 8 days (or by the company itself for the leave admissible under the Employees Compensation Act if not covered by ESI) and he was paid half the salary for 10 days as lay off compensation. The total is 240 days.
Now, coming to the entitlement for leave, we will take only the days he was PHYSICALLY PRESENT for work in the factory, which is 150, and he will ultimately earn only 7.5 or 8 days of leave at the rate of one day for every 20 days worked.
For eligibility of 240 days, we will consider all paid days plus days of lay off and days for which ESI had paid salary, but for the number of days of leave, we take only days physically present.
From India, Kannur
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4483There are two important clauses. One relates to eligibility, and the other one relates to the calculation of the number of leaves to which the employee is entitled.
Eligibility: An employee is eligible for leave (Earned leave or annual leave with wages as it is called in the Act) only if he has worked for 240 days. One who has joined during the year will be eligible to get earned leave in the current year if he has worked for 120 days in the six-month period or simply 20 days in a month.
For deciding the eligibility, all PAID DAYS should be taken into account. That is, this 240 days are inclusive of all weekly off days, holidays, and leave days for which the employee was paid wages/salary. The days an employee remained absent or on leave under ESI, due to employment injury, accidents, or occupational diseases should also be considered as days worked for the purpose of eligibility. Similarly, the days an employee was given lay off shall also be counted as working days.
For example, suppose a person had physically worked for 150 days in the preceding calendar year (2022). He had taken 10 days of earned leave during 2022. He had met with an accident while on duty and was on leave for another 8 days. On account of the shortage of materials, he was given lay off for 10 days in 2022. He was paid weekly off wages for 52 days and had enjoyed 10 days of holidays in 2022.
Now, he will be eligible for earned leave in 2023 because he satisfies the eligibility condition. Though he had come to the factory for only 150 days, he was paid for 222 days (52 weekly off, 10 holidays, 10 days earned leaves which he should have earned from the last year). He was paid by the ESIC for 8 days (or by the company itself for the leave admissible under the Employees Compensation Act if not covered by ESI) and he was paid half the salary for 10 days as lay off compensation. The total is 240 days.
Now, coming to the entitlement for leave, we will take only the days he was PHYSICALLY PRESENT for work in the factory, which is 150, and he will ultimately earn only 7.5 or 8 days of leave at the rate of one day for every 20 days worked.
For eligibility of 240 days, we will consider all paid days plus days of lay off and days for which ESI had paid salary, but for the number of days of leave, we take only days physically present.
From India, Kannur
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FACTORIES ACT-leave rules.doc
Factories Act-Sec.79-Leav e.pdf