All employees enjoy the right to annual paid holiday leave from work. When an employment relationship comes to an end, an employee is entitled to be paid out for leave days accrued but not taken. Sometimes disputes arise when employees claim payment for leave days accrued in past years but never taken, or when employers insist that leave days not taken in a specific leave cycle are forfeited. What is the correct legal position as regards leave days accrued but not taken? Can the employee collect them indefinitely, or are they lost forever when a leave cycle ends?
The Basic Conditions of Employment Act (BCEA) requires an employer to grant an employee her annual leave not later than six months after the end of a 12 month annual leave cycle. This suggests an employee who is keen to take leave, and an employer who must reluctantly accept that leave days must be granted. However this is not always the case.
In the Labour Court in the 2004 matter of Jooste versus Kohler Packaging, the employee had accumulated over 140 leave days over a number of years, and insisted on being paid out the value thereof upon his resignation. The court pointed out that an employee is only entitled to leave days (or payment on termination in lieu thereof) accrued in the current cycle or in a cycle which ended less than six months ago. Leave days accrued in leave cycles that ended more than six months before, fell away. To allow the accumulation of leave beyond this point, would amount to unlawful circumvention of the BCEA.
In the 2013 matter of Ludick versus Rural Maintenance, the Labour Court was confronted with an employment contract.which required the employee to take leave within one month of the employer’s financial year-end, failing which those leave days would fall away. The court pointed out that the annual leave provisions in the BCEA cannot be contracted out of. Thus the provision in the employment contract was invalid. The employee was still entitled to his leave days until six months past the end of the leave cycle, regardless of what was agreed in his contract.
While the BCEA regulates the handling of annual leave days provided by law, some employers offer their employees additional, more generous leave over and above the legal minimum. Additional leave days can be subject to different considerations than those set out in the BCEA. If any such different considerations apply, however, this should be spelled out in the employment contract, whilst ensuring that the BCEA is respected in respect of ordinary annual leave.