A business operates a Delhi factory and a separate head office. HR circulates one calendar and gives everyone the office's combined casual-and-sick-leave balance. The policy may look consistent, but it does not establish that either group receives the rights required by its own law.
Delhi applies the Punjab Industrial Establishments (National and Festival Holidays and Casual and Sick Leave) Act, 1965 through an extension made with modifications. The industrial framework and the Delhi Shops and Establishments Act have different coverage and leave structures. A company can communicate one convenient calendar while maintaining distinct legal workings and records for the groups concerned.
The review should therefore begin with workplaces and employee duties, not a decision that all staff must have identical payroll settings. This guide explains the factory–office boundary, worker consultation and the leave records needed behind the central policy.
Understand Delhi's own extension of the industrial Act
The September 1973 extension notification brought the Punjab 1965 Act to Delhi with specified modifications. The Delhi industrial framework has been enforced from 1 January 1974. Its relevance in Delhi does not depend on the business having a Punjab registered office or Punjabi-speaking employees.
Equally, Delhi's extension does not mean every later Punjab amendment automatically becomes Delhi law. A rule amended in Punjab in 1980 must not be copied into a Delhi compliance manual without establishing its application there. Keep the Delhi extension, applicable rules and later Delhi notifications in the legal-reference file.
The industrial Act identifies factories and plantations through the central legislation named in its text. It defines covered workers and contains exclusions, including a particular wage-and-main-duties condition for managerial, administrative or supervisory employment and specified other categories. Examine actual duties before classifying an employee merely from a title.
After the Labour Codes took effect from 21 November 2025, the old central-law references also require careful reading with the relevant replacement and savings provisions. A newly changed central factory threshold is not a reason to declare, without analysis, that a separate state or extended holiday law has disappeared or now covers every office.
Make a workplace-and-worker coverage map
Prepare one row for each distinct unit and workforce group. Record its legal employer, address, activity, registration history, actual work performed, relevant exemption and proposed holiday-and-leave regime.
| Group | Questions to resolve | Records to compare |
|---|---|---|
| Production workers at the factory | Industrial coverage, worker definition and exclusions | Factory and operational records, appointments and duty descriptions |
| Clerical or technical workers connected with the factory | Whether the industrial worker definition and establishment facts cover them | Actual duties, location and employment arrangements |
| Employees at a separate commercial office | Shops Act coverage and any applicable exclusion | Office activity, establishment particulars and employment records |
| Managers and supervisors | Actual main duties and the precise exclusion conditions | Role description, authority and wage information |
| Workers moving between units | Effective date and changing statutory or contractual position | Transfer letter, attendance and previous leave ledger |
Do not classify every person paid from the factory's bank account as an industrial worker. Conversely, a clerical worker is not automatically outside the industrial definition merely because the role is called office staff. Physical location and job description must be read in the statutory context.
A difficult mixed-use premises should receive a reasoned coverage conclusion. Keep the unresolved issue assigned to a reviewer rather than configuring the whole business under whichever payroll template has fewer fields.
Compare the leave structures before merging policies
For a worker covered by the industrial Act, the stated structure is three national holidays—26 January, 15 August and 2 October—four selected festival holidays, seven days' casual leave and fourteen days' sick leave, subject to the applicable conditions and wage provisos.
The Delhi Shops Act has its own section 22 leave structure. It provides a sickness-or-casual-leave entitlement of at least twelve days in the year, with the relevant service provisions, and a separate privilege-leave framework. These are different statutory designs. Do not turn “twelve days combined” into the industrial worker's entire casual-and-sick entitlement.
An office policy giving twelve combined days and a common holiday calendar may therefore be inadequate for covered factory workers. Conversely, simply copying the industrial half-pay sick-leave rule into an office payroll does not establish compliance with the office's applicable law and employment terms.
Keep earned or privilege leave outside this comparison unless its own rules have also been reviewed. Twenty-one days obtained by adding industrial casual and sick leave are not automatically interchangeable with twenty-one unrestricted annual-leave days.
Select factory festival holidays through the applicable consultation
The industrial framework includes consultation between management and workers about the festival holidays selected from the statutory schedule. A corporate head-office email announcing its preferred festivals is not, by itself, evidence that the required factory process occurred.
Identify the workers' appropriate representatives under the rules applicable in Delhi. Give them the proposed dates and a genuine opportunity to participate. Preserve the invitation, representation basis, proposals considered, attendance and recorded outcome. Where the applicable rules require an election or a particular representative structure, follow that process rather than choosing a manager's preferred spokesperson.
Use the actual scheduled festivals and any applicable additions. A bank holiday or an optional holiday appearing in a government-office list does not automatically become one of the factory's selected statutory festival holidays. A company can give additional holidays voluntarily, but should label them correctly.
If workers and management disagree, follow the prescribed dispute or settlement process and calendar timetable. Do not assume that circulation of an unresolved draft establishes final selection. Equally, do not import Punjab's later election dates, forms or dispute deadlines into Delhi without confirming the Delhi-applicable rule.
Maintain the required notice and communication through the applicable industrial procedure. An intranet entry is useful communication, but it should not silently replace a prescribed workplace display, Inspector communication or statutory record.
Separate leave entitlement from leave wages
The industrial wage provision contains a continuous-roll condition: except for a national holiday, the worker must have been continuously on the establishment's rolls for the preceding month to qualify for the stated wages. A national-holiday wage decision should not automatically be rejected because the worker has not completed that month.
Sick-leave wages involve another distinction. The provision addresses workers entitled to the specified statutory sickness benefit or allowance and otherwise provides half the average daily wage, subject to the other conditions. It does not make every casual-leave day half paid, nor does it abolish all leave merely because the worker has an ESI identifier.
For a new worker requesting leave, the reviewer should separately establish the category, applicable service conditions, wage qualification, medical evidence and benefit position. An HR status such as “probation” cannot decide all these questions.
For a worker receiving a better contractual full-pay benefit, preserve that issue in the review. The Act protects more favourable rights under the stated sources. A statutory minimum is not an automatic instruction to reduce an existing lawful benefit.
Check sickness-benefit entitlement at the relevant time
The printed industrial provision refers to the ESI Act and Plantation Labour Act. Those references need the appropriate successor-law and transitional treatment following the Codes. The question remains a legally supported benefit-entitlement analysis, not a shortcut based on whether the employee's record contains a number.
Keep the relevant coverage and benefit information, certified absence dates and conclusion about employer-paid sick-leave wages. Where entitlement or a claim is disputed, record what remains unresolved and the interim payroll decision approved. Do not treat every unsuccessful claim as proof that the worker was never legally entitled to the benefit.
Separate statutory benefits from a company medical-insurance policy. A private medical reimbursement or hospitalisation policy does not automatically satisfy the particular sickness-benefit proviso in the holiday-and-leave Act.
Only the information necessary to determine the employment and wage outcome should enter the ordinary payroll working. Keep sensitive medical material with authorised reviewers. A factory holiday-notice board has no purpose displaying personal sickness details.
Calculate wages under the correct regime
The industrial Act uses an average-daily-wage framework based on full-time wages during the preceding three calendar months, excluding overtime. It has a special previous-month actual-work basis for daily-rated and piece-rated workers.
For illustration, assume a daily-rated covered worker's properly included previous-month wages are ₹18,000 for twenty actual workdays. The resulting average is ₹900. If employer-paid sick leave at half the average is due under the applicable conditions, the illustrative daily amount is ₹450. This example does not set the office employee's sick-leave pay or remove a better full-pay benefit.
Map the wage components to the industrial definition and exclusions. Do not use CTC or take-home pay mechanically. Keep the actual method and input period visible so another reviewer can reproduce the calculation.
Holiday work has its own employee option under the industrial Act: twice the average daily wage, or the average wage for the worked day and a substituted holiday paid at that average within ninety days. Preserve the employee's choice and actual substitute date. A company-wide “comp off expires after six months” setting should not override that statutory timing.
Maintain an individual account beside the calendar
The industrial Act requires an account of each worker's festival holidays, casual leave and sick leave and gives the worker access to that account. The register should establish the worker's joining particulars, opening entitlement, applications, periods, grant or refusal and the supporting remarks needed to explain treatment.
Use the prescribed register under the rules actually applicable in Delhi. Do not label a Punjab-amended form or office leave report as Delhi statutory compliance without comparing its requirements. A digital ledger can help prepare the information, while the permitted form, authentication, access and display obligations still need attention.
Reconcile the leave account with attendance and payroll every month. Investigate sick leave shown as ordinary unpaid absence, casual leave debited against earned leave without explanation, and holiday attendance without compensation. Keep the original and corrected versions where an error has been repaired.
The separate office ledger should follow its own applicable regime. A common employee identifier is useful for transfers, but should not erase the legal distinction or the worker's accrued contractual rights. Keep a transfer reconciliation identifying the balances, their legal character and the date each responsibility changes.
Audit the common policy using real cases
Test at least five cases: a new factory worker on a national holiday, a longer-serving worker taking casual leave, a sick worker entitled to statutory benefit, a worker without that entitlement, and an office employee taking sickness or casual leave. Add a holiday-work case if the factory operates on selected dates.
For each case, compare the policy wording, payroll setting, statutory basis, required evidence and actual outcome. A policy can be more generous overall and still mishandle a specific protected category or procedure. Correct the particular defect rather than relying on a favourable annual total.
Publish a central calendar that clearly identifies factory and office applicability and labels additional company holidays. Maintain the local statutory notices and worker records underneath it. State who approves revisions and communicates changes to shift workers and employees without regular intranet access.
For practices supporting mixed factory-and-office clients, assureOffice can sit within the surrounding financial and practice workflow. Information is available at assureoffice.in. The actual coverage decision, consultation record, leave account and payment evidence remain the employer's compliance file; no automatic leave-law determination is assumed.
Frequently asked questions
1. Does Delhi's industrial holiday law cover every commercial office?
No automatic conclusion follows. Establish the workplace's industrial coverage and the employee's position. A separate commercial office can require a Shops Act review, even where the company also owns a factory.
2. Why does a Punjab-named Act matter in Delhi?
It was extended to Delhi with modifications by the 1973 notification, and the Delhi framework has operated from 1 January 1974. Its title does not restrict it to businesses headquartered in Punjab.
3. Does every later Punjab amendment automatically apply in Delhi?
Do not assume so. Use the Delhi extension, locally applicable rules and later Delhi measures. A current Punjab compliance calendar cannot simply be copied as the legal authority for Delhi procedures.
4. Can factory and head office share a calendar?
They can share an employee communication tool, provided it identifies applicability and delivers each group's rights. Keep any required local selection, notices and records. One calendar does not itself establish identical legal coverage.
5. Is the office's twelve-day combined balance sufficient for factory workers?
Not necessarily. The industrial framework separately states seven casual and fourteen sick days, subject to conditions and wage provisions. Audit the actual entitlements instead of assuming the office template satisfies them.
6. Are industrial sick-leave days always fully paid?
The statutory wage provisos address sickness-benefit entitlement and otherwise half the average wage. Check the relevant conditions and better contractual rights. Do not describe the entire fourteen-day entitlement as automatically full pay.
7. Does ESI registration cancel casual leave?
The industrial proviso concerns sick-leave wages and the relevant benefit entitlement. It is not a blanket cancellation of casual leave or national and festival holidays. Analyse each category separately.
8. Who participates in festival selection?
Management and the appropriate workers' representatives participate through the applicable consultation process. Verify how those representatives are constituted under Delhi's rules and preserve the actual consultation rather than selecting a spokesperson informally.
9. Can HR choose festivals solely from a bank-holiday list?
The industrial festival schedule and applicable notifications govern statutory selection. Bank and government-office calendars serve different purposes. Additional company holidays can be provided, but should be labelled separately.
10. Is an intranet announcement enough for statutory display?
Do not assume it replaces the prescribed display or communication. Check the applicable industrial procedure, retain the required notice and use the intranet as additional communication where appropriate.
11. Does a new worker need one month's service for national-holiday wages?
The industrial wage qualification expressly excepts national holidays. Apply the actual provision rather than a universal probation rule. Other holiday or leave categories require their own wage and service review.
12. Can private medical insurance replace statutory sickness benefit?
Not automatically. The proviso refers to specified statutory benefit entitlement. A company insurance policy has different terms and does not establish that the legal sickness-benefit condition has been met.
13. What if a sickness-benefit claim is rejected?
Identify why it was rejected and whether legal entitlement is absent, documentation is missing or the decision is disputed. Obtain a supported payroll conclusion rather than changing wages solely because no benefit payment was received.
14. How are daily-rated industrial wages averaged?
The Act's special proviso refers to wages for actual workdays in the immediately preceding month. Use properly included wages and documented days. Monthly-paid workers have the separate general averaging basis.
15. Can CTC be used as the leave-wage figure?
Not mechanically. The industrial definition and exclusions govern the relevant calculation. Prepare a component reconciliation instead of treating every employer cost or employee bank credit as included wages.
16. Who chooses the industrial holiday-work compensation option?
The Act gives the option to the worker. Preserve the choice between the stated double-average-wage treatment and the paid substituted-holiday alternative, including its ninety-day timing.
17. What leave register should the factory maintain?
Maintain the individual festival-holiday, casual-leave and sick-leave account prescribed by the Delhi-applicable rules. Check its required particulars and worker access. A corporate calendar or office balance report is not a substitute.
18. Can a transfer overwrite the old leave balance?
Prepare a transfer reconciliation first. Identify the balance's legal and contractual character, effective date and new unit's regime. A software move between cost centres should not erase accrued rights or the historical record.
19. Did the Labour Codes automatically abolish the extended holiday Act?
Do not infer that from replacement of a central enactment mentioned in its text. Examine the applicable repeal, savings, adaptations and Delhi measures. Coverage and cross-references require a reasoned current-law analysis.
20. How can assureOffice support the review?
assureOffice can form part of the wider practice workflow. The employer and adviser should retain the actual coverage analysis, consultation, individual accounts and payroll evidence; no automatic determination of factory or office leave rights is assumed.