Employees are most productive when they achieve work-life balance that enables them to meet their responsibilities outside work. In order to ensure that they achieve work-life balance, the employment laws in India stipulate the working hours of an establishment, the categories of leave, the eligibility and duration of such leave. For optimum utilisation of resources and time, a policy in relation to the leave and working hours of the employee (“Policy”) may be formulated by the employer. The Policy should set out the eligibility and requirements of working hours along with the form of leave available to the employees. The employment laws that govern the leave and working hours of the employees have been illustrated.  

Governing Legislations with respect to Leave and Working Hours

The leave and working hours of employees employed in shops or commercial establishments are set out under the Shops and Establishments Act of the relevant state (“S&E Act”). Almost all the states in India have enacted their own S&E Acts which inter alia regulates the hours of work, interval for rest, opening and closing hours, holidays, overtime work, annual leave, sick leave, casual leave, accumulation of earned leaves, and, other conditions of employment. However, some states provide an exemption in relation to working hours, to the establishments engaged in the IT/ITeS sector. Further, in states such as Maharashtra, managerial employees working in an establishment are exempt from the applicability of the S&E Act. In Delhi, the managerial employees are exempted from the provisions of working hours under the S&E Act. Therefore, the employer may contractually agree to the number of leaves or working hours of the managerial employees in states which provide exemptions under the S&E Act. 

Certain states in India have enacted their own Industrial Establishments (National and Festival Holidays) Act. An employer, whose establishment is situated in a state where the National and Festival Holidays Act has been enacted, shall be required to adhere to the provisions set out therein.

Employees working in factories, mines, building and other construction sites, and plantations are covered under separate legislations i.e. Factories Act 1948, Mines Act 1952, Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act 1996 and Plantations Labour Act 1951, respectively. These legislations govern the working hours of the establishment and the leaves that the employees are entitled to.

The Maternity Benefit Act 1961 regulates paid maternity leave entitlement and other related benefits for women employed in factories, mines, plantations, and shops or commercial establishments (engaging 10 or more employees).

Salient features of Leave Policy

Entitlement of leave: The Policy should clearly define eligibility, benefits and entitlements related to leave to ensure that the employees are aware of their leave entitlements.

Types of leaves and duration of leaves: As per the laws set out above, an employee has the right to avail certain types of leaves, and, it is the responsibility of the employer to ensure that the Policy categorises the leaves that employees are entitled to i.e. privilege/earned leave, casual leave, sick leave, maternity leave and national and festival holidays accordingly.

Procedure for leaves: The Policy should clearly set out the procedure for application of leave along with the details of the person who shall grant leave. Provision for leaves to be carried forward or encashed when not availed by the employee must also be included. The Policy may also set out the consequences of taking any unapproved leaves or taking any leaves over and above the specified limit.

Salient features of Working Hours Policy

Compliance for the Working Hours Policy: The employer must make sure the working hours in the Policy must comply with the legislations mentioned above, else he would be liable to face consequences for the same. The working hours, intervals for rest and days of work, must be clearly mentioned in the Policy to ensure efficiency and avoid any misunderstandings.

Adherence to the Working hours: The Policy should clearly state that the employees shall strictly adhere to the working hours of the establishment. To ensure that the employees are adhering to the working hours, the employer may set out an attendance procedure in the Policy to keep a check on the number of hours an employee works for.

Special Provisions for Female Employees: The Policy may set out other statutory and discretionary benefits for eligible female employees. For instance, besides the regular break allowed to all employees, a women employee who has delivered a child and has resumed work after the postnatal period, shall be entitled to avail additional breaks as prescribed under the Maternity Benefit Act 1961 (“Maternity Act”). The policy may also provide for the option to ‘work from home’ which is an enabling concept recognised under the Maternity Act.

To frame the policies for leave and working hours, the employer must ensure that the Policy is aimed at complying with the provisions of the applicable laws (as mentioned above). Every employee must be aware of the contents of the Policy and the Policy should be easily accessible to the employees at all times. The employees must be made aware of the leave and working hours Policy at the time of their joining. The employer may also get a confirmation from the employees in writing / electronically that they agree to the contents of the Policy.