What is a Leave Policy?

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Employees are the extremely precious asset of an organization. Deficiency of proper leave management can lead to the unauthorized absence of employees from duty, lower productivity, fall in productivity hours, missing important targets, etc. These types of hindrances can be overcome with a proper Leave Policy Manual for employees in the workplace.

For example, if an employee is on leave with no prior message, their work suffers as nobody is equipped for the unannounced absence. But on the same terms, if an employee applies for leave beforehand in that case, the stakeholders are cognizant of it, and the entire team can manage the work in employee absence, and no productivity is lost. Leave Policy Template, when enforced in the company, furnishes a common understanding between the employer and employee upon how leave can be taken while in service.

An annual leave policy makes it clear what staff are and aren’t entitled to do. It also outlines how the holidays will be granted and any business periods where the holiday will be refused.

This policy will help you know:

  • The rules and provisions regarding leaves.
  • The number of leaves allowed.
  • The encashment of the remaining leaves.
  • The procedure for the payment of the same.

Leave Policy Sample

At ‘Name of the Company’, we value our people the most. We understand that the employee has to manage both professional and personal halves of their life with equal balance. For this purpose, he may require to take leave from work. However, the employee should keep in mind that leave is not a matter of right. The company holds the right to approve or refuse the leave application depending on the circumstances.


This policy aims to encourage work-life balance for its employees and describes the number of leave that an employee is entitled to in calendar year.


The policy is applicable to all on roll employees of the Company

Leave Entitlement

All the employees are entitled for following leave:

  • Casual Leave: ‘Number of days’ days
  • Sick Leave: ‘Number of days’ days
  • Privilege Leave: ‘Number of days’ days


  • The leave calculation shall be done on a calendar year basis
  • CL/ SL will be credited to the Employee’s Leave Account at the beginning of the calendar year (1st January / or on date of joining on a pro rata basis for new employees).
  • PL will be credited to the Employee’s Leave Account at the beginning of every month on a pro rata basis.
  • Those employees who join the Company after ‘date’ will be eligible for leave on pro-rata basis for the year.
  • PL can be availed only once the employee completes his probation and his employment is confirmed.
  • Normally, CL/SL cannot be availed for more than ‘Number of days’ daysatone stretch
  • CL/SL will not be granted for less than ‘Number of days’ days
  • For availing CL/SL for more than ‘Number of days’ days, a certificate from the doctor needs to be submitted
  • The company reserves the right to refer any employee to any doctor to ascertain the geniuses of sickness
  • Employees intending to proceed on leave for ‘Number of days’ days or more should apply for the same well in advance

Festivals and Holidays

In addition to the above Leaves there will be ‘Number of days’ paid holidays. The list of paid Holidays will be published at the beginning of the calendar yearPaid holidays can neither be carried forward nor encashed.

Leave Without Pay

Employee may apply for leave without pay in case of negative or insufficient or no leave balance, Reporting Manager will send his recommendation to Head HR for final approval. The holidays/weekly off within the period of LWP will not be paid for and salary is not credited for the employee for the duration of such leave without pay. LWP more than ‘Time Frame’ needs approval of CEO.

Sabbatical Leave

Employees desirous of enhancing their qualifications relevant to their job can go on a sabbatical up to one year for pursuing a full time educational/professional course, provided they have minimum ‘Number of Years’ years of continuous service with the company. Functional Head should send recommendation to Head HR for obtaining final approval from CEO.

Maternity Leave

Maternity leave and benefit shall be granted as per the Maternity Benefit Act 1961 to women employees not covered under the ESI Act. For women employees covered under ESI Act, the maternity leave and benefit shall be granted as per the provisions of the ESI Act. In addition, the leave can be extended up to a maximum of ‘Time Frame’ forsickness/illness related with pregnancy which will be adjusted against her leave balance.

Paternity Leave

Paternity leave shall be granted for a maximum of ‘Time Frame’, toall male employees on account of childbirth or adoption of a child. The applicability of the same extends up to ‘Number of children’ children. Paternity Leave needs to be availed within ‘Time Frame’ of the birth of the child.

Leave During Probation or Notice Period

Employee serving their probation period will/ will not be entitled to take leave in normal course. Employee serving their notice period will/ will not be entitled to take anyleavein normal course.

Leave Application Process

To avail the leaves, employee needs to apply appropriate Leave through HR Portal All applied leaves will be considered as leave only after the reporting manager approves the same on the HR Portal All unapproved leaves will be treated as “Leave Without Pay” or “Loss of Pay”.

Leave Accumulation/ Encashment Policy

An employee is allowed accumulation of a maximum of ‘Number of days’ days of leave. Leave over and above this limit will get automatically encashed at the beginning of the next calendar year. Any time if the accumulated leave exceeds ‘Number of days’ days, the employee has an option to encash leaves in excess of ‘The same number’ days. For the purpose of this calculation leaves accumulated during previous yearsonly will be considered. Leave encashment is calculated on basic salary. Leave encashment will be done through the payroll process only.


The above policy is subject to modification/ amendments/ alterations/by the Management at any time on Business/ Statutory requirements. In case of any doubt, the interpretation of the above terms by the Head HR shall befinal. Exceptions shall be permitted under the scheme only when specifically approved by the Head HR.


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