I have a question regarding leave management in Tamil Nadu. As per the Shops and Establishments Act, employees are entitled to 36 days off annually (SL: 12, CL: 12, EL: 12). However, I’ve noticed some large companies with offices in TN provide fewer leaves than required by law.
Our labor consultant recommends providing 36 days per year. While 36 days of leave plus 9 company holidays are beneficial from an employee’s standpoint, from an employer’s perspective, especially for companies engaged in fixed-bid or time-and-material projects, how is this managed? Could you please share best practices for handling this situation?
There are two things which makes it clear to go with 36 days of leave credit
local laws and prevailing rules
expert advice (consultant)
Now let’s examine the execution portion particularly in your work context
Managing leave entitlements while balancing business requirements, particularly in fixed-bid or time-and-material projects, can be challenging. By taking a proactive approach to leave of absence, you can better align project timelines, client commitments, and employee well-being, ensuring a smooth workflow even during periods of high leave utilization
Let me suggest some of the best practices and you may consult your management and take a call
Resource plan and forecasting
Build in leave buffers when estimating project timelines. For fixed-bid projects, account for the potential leave days of key employees, especially those working on critical tasks, to avoid delays.
Maintain a flexible resource pool where other team members can fill in during leaves. Cross-training employees can help avoid bottlenecks.
To prevent too many employees from taking leave simultaneously, set policies that limit how many employees from the same team or department can be on leave at the same time.
Staggered leave allocation
Encourage employees to plan leaves in advance. Having visibility into when employees will be off allows for better project scheduling and task reallocation.
Implement policies restricting leave during high-demand or critical project phases while ensuring employees still get their leave throughout the year.
Compensatory off
Offer compensatory leave when employees work during holidays or weekends. This ensures work continuity during critical times while compensating the employees for their additional effort.
Leave encashment
Offer leave encashment options or allow employees to carry forward unused leave to reduce the impact of excessive leaves.
Adjustment within contracts
Include a clause in client contracts for fixed-bid projects, clearly defining acceptable project timelines and any buffer for leave days.
In time-and-material contracts, explicitly account for leave days in the billable hours and resource availability. Clients can be informed ahead of time when key resources are scheduled for leave.
Deploy temp staff
Hire temporary resources during peak leave periods. This reduces the strain on the existing team and maintains project continuity.