ANNUAL LEAVE

During the first half of December, I received no less than 73 telephone calls from employers inquiring about the ins and outs of annual leave. I must admit I was quite surprised to learn of the high incidence of ignorance existing among employers on the subject of annual leave, and also the high incidence of myths surrounding this subject.

Let us then have a look and try to clarify this section (chapter 3 sections 20 & 21) of the Act.

1. Note that the provisions for annual leave do not apply to employees who work less than 24 hours per month for an employer. This provision applies equally to domestic workers.

2. In the act, no reference whatsoever is made to the "accumulation" of annual leave. Therefore, since the accumulation of annual leave is not prohibited by the act, it means that it is permitted.

In terms of the Act, annual leave accrues to an employee. The leave accrues at the rate of one hour for every 17 hours worked, or one day for every 17 days worked, or 1,25 days per month, the total permitted minimum being 15 working days per annum on full pay in each annual leave cycle or in each of period of 12 months calculated with from the date of employment.

The Act refers to 21 consecutive days and if you check the calendar you will see that if the employee works a five-day week, then 21 consecutive days is 15 working days. In the case of the employee who works a six-day week, that employee is also entitled to 21 consecutive days which means in fact that he will receive 18 working days on full pay, and his 18 working days will in fact also be the equivalent of 21 consecutive days. It is important to note that the Act states that the accrual applies at the rate of one day for every 17 days on which the employee worked or was entitled to be paid.

Note therefore that a public holiday, on which the employee stays at home but gets paid for the public holiday, that public holiday will represent a day on which "the employee was entitled to be paid", and therefore the public holiday will be taken as "a day worked" when calculating each period of 17 days. Should the employee be at home on sick leave, and the days that he is off sick constitute paid sick leave, then those days would also be classed as valid days for the purpose of calculation of the 17 day period.

However should the employee be off sick and he has no sick leave days to his credit and is therefore on unpaid sick leave, or on any other type of unpaid leave, then those days off would not qualify as "a day on which he was entitled to be paid" and would therefore be excluded from the calculation of any 17 day period.

To “ accrue” something has a different meaning than the meaning of “to accumulate" something.

To “accrue” means to have a natural growth resulting from an advantage, such as interest accruing as a result of the advantage of having money invested.

Therefore the "accrual" of annual leave to an employee is as a result of that employee having the advantage of being in employment which is subject to the provisions of the Basic Conditions of Employment Act.

An employee whose employment is not subject to the provisions of the Act, such as an employee working less than 24 hours per month for the employer, will not have the advantage of the protection of the Basic Conditions of Employment Act, and therefore is denied the entitlement of the "accrual " of annual leave.

4. To "accumulate" means to “ heap up by degrees” or to “amass” a quantity of something. And thus, in effect, the Act is stating to the employee the following: “ We will pay you interest on the number of days you work ,in the form of annual leave, or allowing you to take off a certain number of days in exchange for days worked. In other words, the number of days that we will pay you will “accrue” to you over a period of 12 months."

The Act is silent on how and when the employee may “take ” or “use” the leave days thus accrued in terms of the act.

Therefore, there is nothing to prevent the employee from "accumulating" the leave days which have "accrued" to him.

The employee therefore can “amass” or accumulate his accrued leave days.

Important Note :

Only employees who work less than 24 hours per month for the employer are denied the benefits of annual leave. This means that the so-called "temporary employee" and the so-called "independent contractor" are also entitled to the accrual of annual leave.

It is common practice for some employers to deduct a certain monthly amount from the wages of a "temporary employee" or from the wages of the "independent contractor", put this money into a “Leave Account” for the employee’s advantage, and when that employee goes on annual leave or on sick leave, he/she is paid for those leave days from that “Leave Account”.

Please note that this practice is not only despicable, but is totally illegal and in fact the employer is guilty of breaching the Basic Conditions of Employment Act, and is also guilty of fraud because he has defrauded the employee of a legal entitlement, namely paid annual leave and paid sick leave.

Any employee would, under those circumstances, have a right of action against the employer and would be entitled to sue the employer for damages.

5. The Act states further that the employee is entitled to take leave accumulated in annual leave cycle on consecutive days.

This means that the employee is entitled to accumulate the annual leave as it accrues to him in each period of 17 days or at the rate of 1,25 days per month and take the full amount of leave thus accumulated over a 12 month period, at one time and on consecutive days.

Therefore, at the end of leave cycle or at the end of a 12 month period calculate from the data employment, the employee can submit an application to the employer, requesting that he be granted the full amount of 15 working days leave, or 21 consecutive days, which he has accumulated for that leave cycle, and that the employer must grant that request because the employee is entitled to take that leave.

This then means that should the employee request to take his accumulated 15 days leave at the end of leave cycle, the employer may not refuse that request and say that "it does not sue does now - but you can take seven days if you wish."

The Act says the employee "is entitled" to take the amount of leave accumulated "on consecutive days."

6. The Act states further that "an employer must grant annual leave not later than six months after the end of the annual leave cycle."

This particular provision (section 20 (4)) has been the cause of much confusion among employers.

This provision does not mean that the employee is forced to take any accumulated leave remaining from the previous leave cycle, within six months of the end of that leave cycle.

Many employers are under the impression that if an employee has any leave days to his credit from the previous leave cycle, then this provision means that the employee must take that leave within six months of the end of the cycle.

What this provision means is that if the employee, for whatever reason, does not take his annual leave at the end of a leave cycle, but applies for his leave after the end of the leave cycle, the employer has no option but to grant that request.

This provision is made to cover those situations where, perhaps due to pressure of work, or perhaps due to the fact that an employee possesses certain skills which are essential to the running of the business, and he cannot take his annual leave by the end of the leave cycle but wishes to take it during the first six months of the next leave cycle, the employer is legally obligated to grant that request for annual leave.

In other words, the employer cannot continually refuse requests for leave made by that employee by continually stating that "we need you", or "we cannot afford to let you go leave.”

The Act protects the employee against that type of exploitation by forcing the employer to grant annual leave within a certain period of time, if such leave is requested by the employee.

This policy should clearly lay down the employer's rules and regulations regarding annual leave.

[a] if an employer has an annual shutdown period, the employer is entitled to warn employees that it is the responsibility of the employee to ensure that he or she has sufficient leave days to his/her credit to cover the full annual shutdown period.

Employees should be further warned that if they do not have sufficient annual leave days available to cover the full annual shutdown period, then the number of days short will be treated as unpaid leave.

[b] the employer may not introduce a "use it or lose it" policy. Such a policy would be illegal, and therefore unenforceable even if the employee signs such an agreement.

The reason it is illegal is quite simply that the employee has a legal entitlement to annual leave, and the employer may not introduce rules and regulations that deprive the employee of that legal entitlement.

[c] note that annual leave may only be taken by agreement with the employer. Therefore the employer is not obliged to grant a request for annual leave every time the employee requests it. Annual leave is requested and considered. It is not demanded and taken.

The exception to this rule is that a request for unpaid leave must be granted. This rule should be embodied in the Policy, namely that management reserves the right to refuse any request for annual leave, and that any request for annual leave will be granted at the discretion of the employer..

At the same time however, management must be reasonable and must realise that there are times when an employee finds it necessary to take two or three days from his annual leave for private purposes.

[d] payment for annual leave may only be made upon the resignation, dismissal, retrenchment, death or retirement of the employee. It is illegal to pay an employee for annual leave under any other circumstances.

[e] Employers must exercise great care in compiling the Annual Leave Policy and must ensure that all conditions contained therein are not in contravention of any section of that the Act, that the conditions are reasonable and are legally enforceable.

[f] it would, for example, be unfair to have a policy that stipulates that all annual leave must be taken by the end of the leave cycle in which it is accrued, and then refuse any employee's request for leave in the last month of that leave cycle for whatever reason.

As an example, I received an inquiry from one employer who has just such a rule in place, namely that all employees last take their annual leave by the end of the leave cycle in which it accrues, or it is forfeited.

One employee went on leave from the 1st December 2003 to the 31st December 2003.

However, on 5^th December 2003 the employee fell ill, and was hospitalised and booked off by her doctor until 31st December. This meant that the annual leave now had to be converted to sick leave, thus leaving the employee with the number of days annual leave still to her credit at the expiry of the current leave cycle, and quite obviously she was unable to take that annual leave within the stipulated period.

The company stated that it was company policy to "use it or lose it" and therefore of this employee would now forfeit those remaining annual leave days. Quite rightly, the employee objected to this since it was not due to any fault of the employee that the annual leave was not taken with in the stipulated period.

The employer had no option but to allow the employee to carry this leave over into the next leave cycle, and to allow the employee to take this annual leave at some time during the next leave cycle. The employer was entitled to stipulate that the carried over annual leave may not be combined with annual leave accumulated during the next leave cycle.

The employer would be entitled to so stipulate, since the provisions of the Basic Conditions of employment Act apply only to the minimum leave conditions stipulated therein, and do not apply in cases where the employer permits an annual leave entitlement greater than that the minimum provided for in the Act. For example, if an employer permits annual leave of 20 working days on full pay, then at the provisions of the Act apply only to the first 15 days of the permitted 20 days.

An employer would therefore be fully entitled to stipulate in a Leave Policy that employees are only permitted to take a maximum of 15 working days consecutively, and the remaining five days may be accumulated up to a stipulated maximum, or that the remaining five days must be taken by the end of the following leave cycle, or whatever rule the employer wishes to impose in respect of those five days.

[g] It is illegal to require or permit an employee to do any work whilst on any period of leave, whether annual leave, sick leave, family responsibility leave, unpaid leave or maternity leave. I have heard of employers who for example, have an employee who is on maternity leave and they insist that that employee must carry out office work while at home on maternity leave.

This is totally illegal, and is in breach of the Basic Conditions of employment Act. It is also illegal to require or permit an employee to be "on standby" during any period of leave (annual leave, sick leave, family responsibility leave or unpaid leave) Should such "standby" be required on a public holiday, then the employee must be paid for that duty.

[h] if an employee falls ill during any period of annual leave, and produces a valid medical certificate to prove the period of illness, then that period of illness must be converted to sick leave and the employee's annual leave entitlement must be credited with the number of days covered by the medical certificate.

I trust that the above has clarified some of the "do’s” and “don’t’s” and some of the “you may” and the “you may nots” regarding annual leave in terms of Chapter 3 of the Basic Conditions employment Act.

Should you require further information or further clarification, please e-mail Derek Jackson at advice@labourguide.co.za