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In the mid-70s, a major industrial firm in Karnataka faced a serious dispute when Independence Day fell on a Sunday. The company chose not to provide a compensatory day off, which led to protests from workers citing the National and Festival Holidays Act in India. This disagreement escalated and eventually reached the Karnataka High Court, highlighting just how important it is for employers to understand and follow the rules around national and festival holidays.
Understanding the National and Festival Holidays Act in India isn’t just a legal formality—it’s essential to building a compliant and respected workplace. Whether you have a team of HR professionals, or you’re an entrepreneur, or just an employee trying to understand your rights, this blog gives you everything you need to know.
These holidays are observed by Karnataka’s banks, post offices, and all state government administrative offices.
The five festival holidays are to be selected from the official government list and finalized in consultation with employees or their representatives.
The selection gives companies the flexibility to choose holidays that best reflect the cultural and religious makeup of their workforce. For example:
In some industries, such as security, facility management, or critical operations, certain employees may be required to work even on designated national or festival holidays.
In such cases, employers are legally obligated to either:
India is home to diverse cultures, religions, and festivals. Beyond the compulsory holidays in India, many companies now offer floating holidays. These allow employees to take time off on days that matter most to them—like regional new years, religious festivals, or birthdays.
This is not just a feel-good gesture. It shows cultural sensitivity and improves employee satisfaction.
| Criteria | Holiday | Leave |
|---|---|---|
| Definition | Employer-declared day off | Employee-initiated time off |
| Examples | Republic Day, Diwali, Eid | Sick leave, casual leave, earned leave |
| Salary Status | Paid by law | Depends on leave balance |
| Accrual | Not applicable | Accumulated based on tenure/work days |
| Carry Forward | Not applicable | Often allowed (especially earned leave) |
Let’s revisit the case mentioned earlier.
In the 1970s, a Karnataka-based company faced protests when it didn’t grant a compensatory day off after Independence Day (August 15) fell on a Sunday. Workers cited the Karnataka Industrial Establishments (National and Festival Holidays) Act, 1963, which mandates paid holidays on national and festival days.
The Labour Inspector ordered the company to provide a compensatory holiday, but the company argued they had already given the required holidays and that the law didn’t require a replacement if a holiday fell on a weekly off like Sunday. The dispute escalated to the Karnataka High Court.
The court ruled that Labour Inspectors do not have the authority to mandate additional holidays beyond what the law specifies. However, the judgment also highlighted the importance of transparent compliance to avoid disputes and unrest.
For Indian companies working with clients in American or European time zones, it’s common to observe foreign national holidays, like July 4th (U.S. Independence Day), especially when client offices are shut.
While Indian employers may choose to give employees a day off on these dates to stay aligned with client schedules, it’s important to note that these are not considered part of the mandatory national or festival holidays under Indian labour laws.
If such days are observed, they will be treated as additional or optional holidays and must be clearly recorded in the company’s internal holiday policy. They cannot replace or count toward the mandatory Indian national or festival holiday requirements.
Take the time to plan your holiday calendar, keep employees informed, and ensure payroll systems are aligned.
If you need expert guidance to draft your holiday policy, manage labour compliance, or ensure payroll accuracy, Vishaal Consultancy Services is here to help simplify the process for you. Reach out today to stay compliant and keep your workforce happy.
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