Annual Leave

Most employees seek to take leave during this month and it is therefore imperative that the employees and employers are aware of their rights is respect of Annual Leave entitlement.

Section 20 of the BCEA determines annual leave entitlement and payment for such leave. The relevant provisions are the following:

  • Employees are entitled to 21 consecutive days’ annual leave on full remuneration in respect of each annual leave cycle (Section 20(2)(a)). This is in essence the same as 15 working days, as “consecutive” includes weekends;
  • An employer and an employee can however agree to either giving one day of annual leave on full remuneration for every 17 days on which the employee worked, or one hour of annual leave on full remuneration for every 17 hours on which the employee worked (Section 20(2)(b) and (c));
  • An employer must grant an employee an additional day of paid leave if a public holiday falls on a day during an employee’s annual leave on which the employee would ordinarily have worked (Section 20(8));

 

Any annual leave as set out above must be paid in an amount equivalent to the remuneration that the employee would have received for working for a period equal to the period of annual leave, taking into account the employee’s rate of remuneration immediately before the beginning of the period of annual leave, and the provisions of Section 35 (Section 21(1)). The important provision of Section 35 in this regard is subsection (4), which provides that if an employee’s remuneration or wage is calculated, either wholly or in part, on a basis other than time or if an employee’s remuneration or wage fluctuates significantly from period to period, any payment to that employee must be calculated by reference to the employee’s average remuneration or wage during the preceding 13 weeks or if the employee has been in employment for a shorter period, that period. As a simple example, this means that average commission must form part of leave pay. By virtue of a determination published by the Minister in terms of Section 35(5)(a), contributions such as housing allowance, medical aids and provident fund contributions and payments in kind must also be taken into account in calculating leave pay.

The next question is when are employees entitled to take leave. In this regard, it is crucial to remember that any leave is actually taken at the instance and discretion of the employer. It is therefore the prerogative of the employer to decide when employees may go on leave, or refuse an employees request to go on leave. Similarly, it is the right of an employer to place an employee on leave, even if the employee does not want to go on leave. This is made clear in Section 20(10) of the BCEA, which provides that annual leave must be taken either in accordance with an agreement between the employer and employee, or if there is no agreement at a time determined by the employer. The only proviso in the BCEA is found in Sections 20(4), (5) and (6), where it is provided that:

  • An employer must grant annual leave not later than six months after the end of the annual leave cycle;
  • An employer may not require or permit an employee to take annual leave during any other period of leave to which the employee is entitled in terms of the BCEA, or during any period of notice of termination of employment. This means that annual leave cannot be substituted for sick leave for example, and an employer can not try and reduce an employees outstanding leave by forcing the employee to take

Once an employer has granted or afforded annual leave to an employee, an employer may not require or permit an employee to work for the employer during that period of annual leave (Section 20(9)). An employer must therefore ensure that if it grants an employee’s request for annual leave, that it would not need the services of such employee, as such employee would be entitled to refuse to return to work even if called upon to do so by the employer, and the employer would not be entitled to take any action against the employee.

As it is the prerogative of the employer to designate when an employee may go on leave, the employer may determine the process applicable for procuring such leave. In this regard, an employer should institute a proper process, in the form of a policy, relating to the application for leave by an employee and for the approval of such application. The reason for this is clear. It removes any uncertainty regarding whether an employee wanted leave or whether an employee has been granted leave. It also avoids employees relying upon purported leave approvals by supervisors or junior management employees not entitled to approve leave. The Courts have held that a failure to follow such process would be regarded as no valid application for leave (see Maidi v MEC for Department of Education & Others (2003) 24 ILJ 1552 (LC)).

It is often a practice in employers that employees are paid out for accumulated leave, instead of actually taking such leave. Such a practice will however fall foul of Section 20(11) of the BCEA, as this Section specifically provides that an employer may not pay an employee instead of granting paid leave except on termination of employment. Therefore, in law, employees can only be paid out for leave upon termination of employment. Therefore, an employer who pays out leave to an employee even in terms of an agreement with an employee could still be faced with a demand for paid leave by such employee, as such agreement will be invalidated by the BCEA, on the grounds discussed above.

As stated above it is important that companies adopt clear policies in regard to the granting of annual leave to limit disputes and unhappiness amongst staff. Please also note that this article is drafted in terms of the Basic Conditions of Employment Act and there may be other legislation applicable to you should you fall within the ambit of a Bargaining Council Main Agreement.

Should you require any assistance in respect of the above or in respect of any other employment related issue, have a look at our Labour Relations column on Whichfranchise or go to www.labournet.com for more information on the services provided by LabourNet.

Disclaimer

The information published in this article or newsletter is of general nature and should not be used without obtaining specific advice as to its application in your business or under your specific circumstances. LabourNet will accept no liability if the information is used without first obtaining specific advise from one of our consultants.

 

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