Companies must clarify leave policy

Two recent court cases have confused the issue in respect of leave pay, specifically regarding accrued leave.

Companies must clarify leave policy

This article was originally published on page 12 of The Cape Argus on July 07, 2004
Two recent court cases have confused the issue in respect of leave pay, specifically regarding accrued leave.

The cases are Jooste v Kohler Packaging Limited 2003 12 (LLC) 6.7.2 and Jardine v Tongaat Hewlett 2003 12 (LLC) 6.7.1.

Both cases deal with the accumulation of leave, a problem that all employers and employees face over a period of time.

In the case of Jooste v Kohler Packaging Limited, the court held that the purpose of the Basic Conditions of Employment Act No. 75 of 1997 (BCEA) is to ensure employees take annual leave.

In terms of the act, the employer may not refuse that entitlement within an 18-month period. The BCEA leave is the basic entitlement of 21 consecutive days in a 12-month cycle.

The court concluded that Section 40 of the act, which regulates accumulated leave, is applicable only to the immediate preceding leave cycle together with leave accumulated in the present leave cycle, ie the cycle during which the employment is terminated.

The latest Labour Court case above has taken the view that it is the employee’s responsibility to insist on annual leave and if the employer refuses to grant such, the matter be dealt with in terms of the BCEA.

Very importantly, the case then differentiates between BCEA leave and claims in terms of the contract of employment and any other policy or agreement between the employer and the employee.

Most organisations have leave in excess of the basic minimum provisions of the act. In respect of that leave, leave may be accumulated and regulations can control the paying out of such leave. The company policy could dictate that leave must be taken and may not be accumulated beyond a certain number of days.

More importantly, the organisation’s policy should also dictate on what basis such leave will be paid out.

Leave in terms of the minimum requirements of the BCEA is paid out at the full definition of total remuneration.

Excess leave, over and above the minimum requirements, could be paid out in terms of company policy on basic remuneration.

It is now clear that organisations need to sort out their policies regarding leave (specifically for leave in excess of the BCEA’s requirements) and create clarity in who they deal with accumulated leave.

It is also important that an organisation understands that within a six-month cycle, after the expiry of a 12-month leave cycle, employees are entitled to take the leave in terms of the act and the organisation may not refuse them such leave.

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