Casual, Earned and Sick Leave Meaning & Their Rules

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One of the terms and conditions of your job contract deals with the leaves that you can avail of during your employment period. Normally, the companies provide the holiday list to the employees at the time of the commencement of the year.

However, the Casual, Earned and Sick leaves’ rules vary between employers and the type of organizations. Further, employees are required to ask for leaves from their employers before availing any of leave.

Different Types of Leaves – Casual, Earned and Sick

In India, there are three types of leaves are allowed, as mentioned below:

Earned Leave/Privilege Leave (EL/PL): Earned leaves are those leaves where you “earn” these leaves by working on workdays. Usually, such leaves are taken for any personal reasons like travel vacations, festivals, which are not declared holidays, etc. These leaves are encashable to the employees. However, to avail of the Earned leave, you have to inform your employer in advance.

General provisions regarding Earned Leaves

  • EL is credited to each employee account at the beginning of the year and then calculated monthly. However, the entitlement of EL depends based on the number of months worked by the employees.
  • In case employees are not able to utilize all their accrued earned leave as credited to their account, they can carry forward into the next calendar year. The carryforward is subject to the next year’s maximum accrual.
  • In case of joining and resignation in the middle of the year, the pro-rata calculation shall be applicable.

Casual Leave (CL): Employees are eligible to avail of casual leaves for unforeseen/urgent situations, and you have to take leave of one or two days leaves. However, companies allow a maximum of 3 days in a month, depending upon the situation. Such leaves are neither encashable nor allowed to be carried forward.

General provisions regarding Casual Leaves

  • Casual leaves are not allowed to be carried forwards, hence automatically expired at the end of the year.
  • In case of joining and resignation in the middle of the year, the pro-rata calculation shall be applicable.
  • Can not be appended with  Earned/Privileged Leave or Sick Leave.

Sick Leave (SL): Sick leaves are allowed on the grounds on sickness or accident met by the employees. However, companies prefer to ask for the medical certificate if the sick leaves exceed 3 days.

General provisions regarding Sick Leaves

  • Sick leaves are allowed to be taken a maximum of 7 days
  • Sick leaves are not allowed to be carried forwards, hence automatically expired at the end of the year.
  • Sick Leave can be appended with Earned Leave.
  • In case of joining and resignation in the middle of the year, the pro-rata calculation shall be applicable.

Provisions of leave as per the governed acts in India

In India, the leave provisions are governed by the Factories Act and the Shops And Establishments Act and the acts follow the calendar year, starting from January to December.

Casual, Earned and Sick Leave Meaning

Leave In Establishments Covered Under The Factories Act

Type of Leave Privileged / Earned LeavesCasual Sick
Quantum per year 1 day leave for every 20 days worked in the previous year
(Eg. 300 days worked = 15 days leave)
Nil Nil
Entitlement On working 240 days in the first  previous year NA NA
Utilization To apply for leave 15 days prior. Leave not to be availed more than
3 times a year
NA NA
Carry Forward Not more than 30 days NA NA

Note: All Management Staff, Executives, Supervisors, workers, and contract workers fall under the definition of ‘worker’ under the Factories Act. Therefore, leave rules to apply to every worker.

Leave-In Establishments Covered Under the Shops And Establishments Act

Shops and Establishments Act provides leave provisions for each State on its own. Hence, every state has its own rules for leave defined and would be different from other states.

Here is the given example of Punjab and Delhi SHOPS AND COMMERCIAL ESTABLISHMENTS ACT, 1958:

PUNJAB SHOPS AND COMMERCIAL ESTABLISHMENTS ACT, 1958

Leave type Privileged Leave/ Earned Leave Casual
Leave
Sick Leave
Quantum per
year
1 leave for every 20 days worked 7 days 7 days
Entitlement After 20 days of continuous employment During the
year
During the
year
Accumulation 30 days Not allowed Not allowed
Annexation Suffixed or prefixed holidays and Sundays to the leave
the period shall not be accounted for as leave. Holidays or
Sundays falling between the period of leave shall be treated as leave

DELHI SHOPS AND ESTABLISHMENTS ACT, 1954

Leave Type Privileged Leave/ Earned Leave Casual Leave Sick Leave
Quantum
per year
15 days 12 days casual-cum-sick leave
Entitlement 5 days after 3 months on
completion of 60 days working
in that period
Not less than 1 day for every completed
period of 1 month (casual-cum-sick leave)
Accumulation 45 days maximum of 3 years Not allowed Not allowed

Note: Leave policy of a company cannot be less than that mentioned by the state’s shop and establishment act.

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