Public holiday – A simple definition
A public holiday or national holiday or legal holiday is a holiday generally established by law and is usually a non-working day during the year.
Public holidays – An introduction
Deciding which public holidays to hand out as a holiday for employees is an important task for an HR manager in every company. Public holidays are linked to local festivities, events of historical significance and linguistic demographics. These holidays are generally declared on a calendar-year basis.
Public holidays in India are governed primarily through:
- The Industrial Employment (Standing Orders) Act – 1946
- The Negotiable Instruments Act – 1881
- The National and Festival Holidays Act – 1963
- The Weekly Holidays Act – 1942
- The Shops and Commercial Establishments Act
- The Companies Act - 2013
Few of these acts are state-level statutes.
Handing out selected public holidays to employees is, therefore, an obligation of every employer. The number of public holidays in most companies vary from 10 to 14 depending on the company’s past practice, HR philosophy and the industry norms. Pre-dominantly, most companies have 12 public holidays, including compulsory national holidays.
The three national public holidays in India, which are mandatory holidays, are:
- Republic Day (January 26th)
- Independence Day (August 15th)
- Gandhi Jayanti (October 2nd)
In a few states, even the Labor Day or International Workers’ Day (May 1st) is also considered as a compulsory holiday.
On these days, all companies, irrespective of laws governing them and nature of ownership (public or private), should generally remain closed. If the nature of operations doesn’t permit closure on any public holiday, relevant statutes provide remedies such as additional compensation/wages or compensatory leave based on the category of employment.
Note: It is necessary to take prior approval, permanent or event-based, of the competent authority under relevant statutes for continued operations on public holidays.
For public holidays other than national ones, the declaration of public holidays depends on the discretion of the concerned states and establishments/companies. As mentioned earlier, the number of public holidays differ from state to state depending on local festivities. These are also known as ‘regional’ holidays.
Granting public holidays as holidays for employees
To decide on the list of public holidays that you’ll grant to your employees, you (as an HR Manager) should first obtain information on the public holidays declared by the Central and State governments, which declare their public holidays during Oct-Nov each year.
This list is notified in their gazette first and then it is published in local/national newspapers. It is easy to find the list of public holidays through newspapers and government/other reliable websites.
You should start the exercise of compiling and finalizing public holidays in mid-November because it requires deliberation and decision from the top management. You should add value to the process by giving information about changing industry/region norms and employees’ feedback on their preferences about public holidays, if available or gathered.
Few companies separate the list of public holidays into ‘compulsory’ and ‘optional’ categories. The ratio is generally 80:20. The purpose of optional public holidays (also called ‘Restricted’ holidays) is to provide the flexibility to employees to take holidays depending on the faith they believe in and their convenience.
If a public holiday falls on a Sunday in a calendar year, few companies declare those Sundays as public holidays. The reason for this practice is that the spirit of celebration is independent of the day on which the holiday falls. On the other side, few companies declare public holidays that fall only on days other than Sundays. The primary logic here is to maximize the number of public holidays granted to employees.
The top management and HR philosophy drive such decisions. That is, whether to give public holidays on ‘gross’ or ‘net’ basis. A large number of companies follow ‘gross’ basis because it is more predictable, allows consistency and helps in business planning to a certain extent.
Standard procedure to prepare holiday list
You can follow this simple procedure to prepare a holiday list for your company:
- Prepare a draft list of holidays based on last three years’ data by mid-November of the current year. Check with HR Managers of leading competitors about their plans as well.
- Collect information about the public holidays declared by your state government and central government from reliable sources by the end of November.
- Propose a list for the next calendar year (January-December) with the corresponding details of last three years (includes the current calendar year).
- For a multi-location company, the basic procedure remains identical. However, you must endeavor to maximize the common holidays across locations after factoring in the prevailing business situation in your company and/or at the specific location(s).
- For a new location/company, conduct a detailed study of the prevailing industry practices in that location while deciding on the list of public holidays to be granted there.
- Explore the possibility of tagging holidays to preceding or succeeding days of weekends so that employees can have longer holidays. However, this is difficult if the company is following ‘gross’ basis for public holidays.
- Make sure that the proposal details include the title of the holiday, the date of the holiday, the day of the holiday and remarks (if any). In case, if you want to change any element of the practice, you should provide logic and supporting information.
- Obtain final approval of your management and keep the approved copy (soft/hard) as a record for reference and for internal/external audit.
- Communicate suitably to the employees latest by December 31st and clarify upfront whenever there is a departure from the past practice. This communication is important, especially if the company observes January 1st as a holiday.
- Permanently, display a list of approved public holidays of the company at relevant locations, including employee self service portals. Provide a copy of your company’s holiday list(s) to the competent authorities under applicable statutes.
- In the case of any mid-year change in the list of holidays for internal or external reasons, make sure that you notify employees about the change well in advance.
You must recognize that public holidays provide excellent opportunities for employee engagement. Therefore, you must include at least a cursory reference to employee engagement activities/ideas in the proposal itself. The underlying idea of public holidays is to facilitate employees to enjoy festivities and related holiday-related activities. These holidays also provide much-needed breaks from their busy routines for employees to get recharged.
greytHR has compiled holiday lists for various Indian states. You can refer and use them as per your requirements.