The Basic Conditions of Employment Act (BCEA) has a number of provisions relating to annual leave in South Africa. These include who is entitled to annual leave and how much an employer must grant. In this article, we outline the key points.
What is annual leave?
The annual leave period of time is used to allow time off work. Employers are required to pay for periods of absence from work due to taking annual leave.
Who is entitled to annual leave?
Employees who work more than 24 hours per month for an employer are entitled to annual leave. This includes part-time employees and casual workers, as well as full-time employees. It applies to those who work a regular number of hours each week or month, even if they do not earn a set amount.
Leave Cycle
The BCEA provides that an employee’s annual leave cycle is the 12-month period following their commencement of employment (appointment date). However, some employers prefer to standardise this so that all employees are on the same leave cycle, e.g. 1 January to 31 December. Although this is not strictly correct, it shouldn’t be a problem as long as the employees are not receiving fewer leave days than the minimum entitlement below.
How much annual leave is an employee entitled to?
In terms of the BCEA in South Africa, annual leave is paid leave and an employee is entitled to the same number of days that they would normally work in three weeks. Practically, this means that an employee’s minimum annual leave entitlement is calculated by multiplying their regular working days by three – e.g. if an employee works five days a week, they are entitled to at least 15 days annual leave each year (5 x 3 = 15). An employer may grant the employee more leave than the act prescribes.
An employee is entitled to accrue a portion of their annual entitlement each pay period. This accrual continues during paid absences including maternity leave and long-term illness. This is calculated by dividing their annual entitlement by the number of pay periods in the year:
A monthly-paid employee working five days a week will be entitled to a minimum of 15 days of annual leave a year, which is calculated as 5 x 3. This result in an accrual rate of 1.25 days a month, which is calculated as 15 / 12 = 1.25.
A fortnightly-paid employee working three days a week will be entitled to a minimum of 9 days of annual leave a year, which is calculated as 3 x 3. This results in an accrual rate of 0.35 days a fortnight, which is calculated as 9 / 26 = 0.35.
A weekly-paid employee working seven days a week will be entitled to a minimum of 21 days of annual leave a year, which is calculated as 7 x 3. This results in an accrual rate of 0.4 days a week, which is calculated as 21 / 52 = 0.4.
By agreement between the employer and employee, the above calculation may be replaced by one of two other options outlined in the BCEA. Rather than using the employee’s contracted regular days and hours, these calculations are based on days/hours actually worked:
1 day of leave for every 17 days worked; or
1 hour of leave for every 17 hours worked
Granting Annual Leave
An employee is entitled to take all leave accumulated at any point in their cycle, on consecutive days. In the absence of an agreement to the contrary, annual leave is taken at a time that suits the employer.
Annual leave during their notice period prior to termination
An employer may not force/allow an employee to take annual leave during their notice period prior to termination of employment.
Annual leave and annual shutdown
Many employers have a shutdown period over December. If an employer has a period of annual shutdown, they may stipulate that annual leave has to be taken to coincide with this. If an employee has exhausted their annual leave before this time, the shutdown period may be treated as unpaid leave.
Should the employer compensate an employee for a public holiday that falls within a period of annual leave?
An employer must grant an employee an additional day of paid leave if a public holiday falls on a day during an employee’s annual leave on which the employee would ordinarily have worked.
What happens to leave not taken during the 12-month cycle?
If an employee does not take his or her full year's leave during the annual leave cycle, the employer is required to grant such leave, if requested by the employee, within the first six months of the next annual leave cycle. The employer may not refuse to grant the request for leave within the six months, and no agreement between the parties may shorten the six-month period. This essentially means that leave is valid for 18 months and does not expire at the end of the 12-month cycle. Leave is carried forward from the previous leave cycle to the first 6 months of the current leave cycle. See Section 20(4) of the BCEA.
What happens to leave if it is not requested within the first six months of the next leave cycle?
The employee is responsible for applying for the leave carried over within the six months following the annual leave cycle. If the employee fails to do so, their annual leave may be forfeited by the employer.
This only applies to statutory leave. Any leave in excess of the statutory minimum is deemed to be contractual leave and is not regulated by the BCEA.
Employers who grant leave in excess of the statutory minimum are advised to enter into agreements regarding the use, forfeiture, and/or payouts of such contractual leave in order to avoid contractual claims.
Can annual leave be exchanged for cash?
An employer may not pay an employee instead of granting paid leave, except on termination of employment.
Conclusion
This article has provided a comprehensive overview of annual leave in South Africa. As you can see, there are many different rules and conditions that an employer must adhere to when granting leave to his or her employees. If you need assistance in terms of payroll services, please get in touch with us.