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how law protects leave pay

By Lavery Modise and Lebogang Kutumela | Sep 01, 2009 | COMMENTS [ 0 ]

THE Basic Conditions of Employment Act 75 of 1997 is designed to establish minimum terms and conditions of employment for employees.

THE Basic Conditions of Employment Act 75 of 1997 is designed to establish minimum terms and conditions of employment for employees.

Among the important provisions of the act is the granting of annual leave on full remuneration.

It provides that all employees who work 24 hours or more a month are entitled to a minimum of 21 consecutive days for each annual leave cycle.

Annual leave cycle is defined as a period of 12 months' employment with the same employer immediately following an employee's commencement of employment or completion of his or her previous legal cycle.

As stated above, annual leave must be on full pay, calculated at the rate applicable immediately before the beginning of the period of leave.

Annual leave might, however, not be taken during the period of other forms of leave or during the period of notice of termination of employment.

Where a public holiday falls on a day during the employee's annual leave, where the employee would ordinarily have worked on that day, the employer must grant such employee an additional day of paid leave.

Annual leave must be taken subject to an agreement between the employer and the employee, failing which the employer may determine when leave is to be taken.

On termination of employment, an employer must, among others, pay to an employee remuneration for any period of annual leave due that the employee has not taken.

The determination of "leave due" and accordingly warranting payment (on termination of employment) has become a highly debated issue.

The debate centres mainly on the question whether leave not taken by the employee during a leave cycle accrues to the employee or whether it is forfeited.

A key provision in the act dealing with this issue is found in section 20(4), which provides that an employer must grant annual leave not later than six months after the end of the annual leave cycle.

The interpretation of this section by the labour court has intensified the debate around this issue, with two labour court judgments coming to two different decisions.

The labour court decisions are Jardine v Tongaat-Hulett Sugar and Jooste v Kohler Packaging.

The labour court in Jardine v Tongaat-Hulett Sugar held that section 20(4) of the Act existed for the protection of employees who might otherwise be denied annual leave.

So, leave not taken within six months after the end of the leave cycle is not forfeited.

In contrast, the labour court held in Jooste v Kohler Packaging that the very purpose of the act is to ensure that an employee takes annual leave.

The court accordingly held that payment will only be made in respect of leave accrued in the cycle immediately preceding that during which the termination takes place.

In the event that an employee fails to take annual leave within six months after the end of the annual leave cycle, such leave will be forfeited and the employee will not receive payment for such leave days upon termination of his employment.

The employer and employees are not allowed to contract out of the main provisions of the act - such as the granting of the minimum period of annual leave.

They may, however, regulate the employee's leave entitlement in excess of the minimum 21 days provided by the act.

The employer may not refuse the employee annual leave entitlement.

In the event that the employer refuses the employee such entitlement, the employee may refer such matter to the Department of Labour.

Having regard to the remedies available to the employee and the purpose of the act, the labour court's decision in Kohler Packaging seems well reasoned and preferable, as it will ensure that employees exercise their rights and take annual leave.

l Modise is deputy chairman of Eversheds and Kutumela an associate at Eversheds


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