We have a factory in Industrial Area with 30 employees, including daily wage workers and technical/administrative staff
We are currently giving 30 days PL + 7 days CL + 4 Days SL + 9 public holidays to staff and 18+7+4+9 to workers if they are present on all working days. The factory works 6 days a week. We also give leave encashment if leaves are not used.
This was old practice since factory started but I feel now we cannot afford to give so many leaves.
Can I reduce the number of leaves and what is the required number of leaves to be given legally?
During Covid, we had paid 50% salaries for absent period to all. Do we need to give PL even for this period?
From India, Aurangabad
We are currently giving 30 days PL + 7 days CL + 4 Days SL + 9 public holidays to staff and 18+7+4+9 to workers if they are present on all working days. The factory works 6 days a week. We also give leave encashment if leaves are not used.
This was old practice since factory started but I feel now we cannot afford to give so many leaves.
Can I reduce the number of leaves and what is the required number of leaves to be given legally?
During Covid, we had paid 50% salaries for absent period to all. Do we need to give PL even for this period?
From India, Aurangabad
Dear friend,
The scale, type and method of availment of leave to your employees including workmen might be more than what are statutorily prescribed. However they have become customary benefits over the period of time. Leave and holidays and discontinuation of customary benefits are conditions of service listed under sl nos 5 and 8 of the IV Schedule to the IDAct,1947 the change of which requires the issuance of 21 days notice in writing before implementation u/s 9-A of the Act.
Of course if there is a bilateral agreement with the workmen concerned in this regard, no such notice is required.
Pandemic and its impact on industry is not going to be a permanent feature. Soon normalcy can return. Already you had paid onlyhalf the salary for the period of non-employment due to lock down against the directive of the State under the DMAct,2005. If you further try to unilaterally reduce the existing leave benefits, it would be viewed as adding insult to injury.
Therefore, better initiate a dialogue with the employees and try to arrive at an amicable settlement in this regard to avoid industrial unrest.
From India, Salem
5967The scale, type and method of availment of leave to your employees including workmen might be more than what are statutorily prescribed. However they have become customary benefits over the period of time. Leave and holidays and discontinuation of customary benefits are conditions of service listed under sl nos 5 and 8 of the IV Schedule to the IDAct,1947 the change of which requires the issuance of 21 days notice in writing before implementation u/s 9-A of the Act.
Of course if there is a bilateral agreement with the workmen concerned in this regard, no such notice is required.
Pandemic and its impact on industry is not going to be a permanent feature. Soon normalcy can return. Already you had paid onlyhalf the salary for the period of non-employment due to lock down against the directive of the State under the DMAct,2005. If you further try to unilaterally reduce the existing leave benefits, it would be viewed as adding insult to injury.
Therefore, better initiate a dialogue with the employees and try to arrive at an amicable settlement in this regard to avoid industrial unrest.
From India, Salem
Dear Mr.Umakanthan,
Thank you for your valuable views. Unfortunately a dialog is futile and any kind of reduction in entitlements is just not accepted. I am saying this with past experience. Hence I just wanted to have a view of others whether such a thing is possible unilaterally. Seems it may be difficult to do.
From India, Aurangabad
Thank you for your valuable views. Unfortunately a dialog is futile and any kind of reduction in entitlements is just not accepted. I am saying this with past experience. Hence I just wanted to have a view of others whether such a thing is possible unilaterally. Seems it may be difficult to do.
From India, Aurangabad
Dear HBJ,
I recommend you check the provisions of Maharashtra Factories Rules, 1963. These rules have been amended time and again. Number days of leave can be more than specified in this act but not less.
If you are unable to reduce the number of days of leave then you may reduce the salary proportionately. As long as you pay the minimum wages, everything is fine. Anything beyond than that is the discretion of the top management.
Thanks,
Dinesh Divekar
From India, Bangalore
I recommend you check the provisions of Maharashtra Factories Rules, 1963. These rules have been amended time and again. Number days of leave can be more than specified in this act but not less.
If you are unable to reduce the number of days of leave then you may reduce the salary proportionately. As long as you pay the minimum wages, everything is fine. Anything beyond than that is the discretion of the top management.
Thanks,
Dinesh Divekar
From India, Bangalore
Dear HBJ,
Existing rights and benefits of employees falling under the category of "workman" cannot be reduced or modified to their disadvantage by the employer according to his whims and fancies. Even in case of others, the employer is bound to honor the terms of the contract of employment already agreed and cannot adversely modify them without the concurrence or consent of the employee. In the event of insurmountable difficulties such as continued losses due to market conditions, technological changes involving heavy investments etc., the employer can change those service conditions mentioned in the IV th Schedule only after 21 days notice. Even then it might be questioned by the affected workmen by means of an industrial disputes u/s 2(k) of the Industrial Disputes Act, 1947and in such a situation too, the employer must be in a position to convince the tribunal. That's why you have to hold discussions with the employees and at least try to get their consent for such reduction in benefits temporarily for some time. If you fail to do so, the disgruntled employees would resort to all kinds of non cooperation like work-to-rule, go slow etc. The employer should always handle situations like this by keeping the long run interest of the organization in his mind.
From India, Salem
Existing rights and benefits of employees falling under the category of "workman" cannot be reduced or modified to their disadvantage by the employer according to his whims and fancies. Even in case of others, the employer is bound to honor the terms of the contract of employment already agreed and cannot adversely modify them without the concurrence or consent of the employee. In the event of insurmountable difficulties such as continued losses due to market conditions, technological changes involving heavy investments etc., the employer can change those service conditions mentioned in the IV th Schedule only after 21 days notice. Even then it might be questioned by the affected workmen by means of an industrial disputes u/s 2(k) of the Industrial Disputes Act, 1947and in such a situation too, the employer must be in a position to convince the tribunal. That's why you have to hold discussions with the employees and at least try to get their consent for such reduction in benefits temporarily for some time. If you fail to do so, the disgruntled employees would resort to all kinds of non cooperation like work-to-rule, go slow etc. The employer should always handle situations like this by keeping the long run interest of the organization in his mind.
From India, Salem
@HBJ
As mentioned by you in post that your unit is "within industrial zone", so there must be other units of different industry, just have a formal discussion of their present policy under this pandemic time,
As the employees of your unit would be from similar locations as of other units, so there is much more in hands of establishment to take inputs from other units about the solutions, and offer a similar solution to employees, that may work with least efforts
As mentioned by you in post that your unit is "within industrial zone", so there must be other units of different industry, just have a formal discussion of their present policy under this pandemic time,
As the employees of your unit would be from similar locations as of other units, so there is much more in hands of establishment to take inputs from other units about the solutions, and offer a similar solution to employees, that may work with least efforts
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