Employees are entitled to 21 consecutive days paid leave (three weeks – 15 working days for a 5 day worker and 18 working days for a 6 day worker) after completing 12 consecutive months service. By agreement, the employee may take 1 days leave for every 17 days worked or 1 hour for every 17 hours worked. The employee’s leave cycle will normally start on the anniversary of his/her joining the employer and will end six months after this date.
If an employee, for whatever reason, does not take leave to which he is entitled by the end of the leave cycle, the employer may not ‘confiscate’ such leave not taken. The employer must instruct the employee to take leave and if he does not, then the employer must take appropriate disciplinary action to compel the employee to take leave. The reason for this is that the employer may not unjustly ‘enrich’ himself at the expense of employees. The employer may also not pay out an employee’s leave except on termination of employment. If the employer grants leave in excess of the BCEA, then this may be encashed. For example if an employer grants an extra week’s leave then (depending upon the employer’s policy) the employee may take the 21 consecutive days required by the BCEA and ask the employer to pay him out for the extra weeks leave.
Leave pay must be paid before the beginning of the employee’s period of leave or by agreement, on the employee’s usual payday. For purposes of calculating leave, this must be calculated at a rate equivalent to the employee’s average earnings for a period of 13 weeks prior to the commencement of the leave (i.e. inclusive of average overtime and any allowances).
The leave period may be reduced pro rata for each day granted (at the written request of the employee) as occasional paid leave during the leave cycle.
While the BCEA sets out minimum requirements, most employers today grant extra leave in recognition of service. Usually after 5 years’ service, employees are granted an extra weeks pay. Some employers also grant extra leave depending on the seniority of the employee.
It is very important to formalise leave by way of a formal published leave policy. This should set out:-
- Leave entitlements based on service and other factors.
- Conditions pertaining to the taking of annual leave during annual shutdowns (if applicable).
- Signing authorities for the granting of annual and casual leave.
- Conditions pertaining to employees taking casual leave and the minimum period of consecutive leave that employees must take.
- A procedure for applying for annual and casual leave, including how leave rosters are arranged and how an employee may book when he or she will take annual leave.
- A requirement that leave forms are completed and APPROVED before an employee may take annual leave. Employees who are absent without permission should not be able to convert this absence into annual leave – otherwise the employer has no record of absence for disciplinary purposes. Absence without permission should be without pay and unless there is very good reason for the absence.
- If employees are allowed to accumulate leave, this should be spelled out together with a stipulation that employees may not accumulate more than the maximum days allowed.
- If extra leave (i.e. over and above that stipulated in the BCEA) is provided, there should be a stipulation that such leave may be forfeited if an employee is instructed to take leave and does not do so. (This only applies to the extra leave, not the minimum leave entitlement stipulated in the BCEA. For example, the employer may grant four weeks leave to longer service employees and allow accumulation of annual leave up to six weeks.
- If the employee already has six weeks accumulated leave and fails to take leave after being instructed to do so, the employee may forfeit the extra weeks leave granted by the employer if it is not taken within the leave cycle. This clause is necessary to protect the employer’s cash flow in the event of a number of long service employees all resigning and having to be paid out their leave during a difficult trading period.
- Another important point is that an employee accumulates leave while on a certain salary. This salary usually increases each year. If he accumulates leave – it is paid out on his latest pay scale, not at the rate at which the leave was actually earned. It is a good inflation proof investment for the employee but can prove very expensive for the employer.
- Any particular conditions pertaining to employees taking unpaid leave if applicable. Some employers might allow employees to take unpaid leave in certain circumstances (e.g. for overseas travel or to visit traditional healers).
Lastly, if you do introduce a leave policy include a provision that it is reviewed at least once every three years so that it is kept up to date.
Bruniquel & Associates (Pty) Ltd
For more information please click here.