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THE PAYMENT OF ANNUAL LEAVE ON TERMINATION OF SERVICE

The question of whether or not an employee is to be paid for outstanding leave not taken when they resign or when the employment is terminated for some other reason is debatable.


The Basic Conditions of Employment Act (BCEA) in section 40(b) states that “on termination of employment, the employer must pay an employee remuneration calculated in accordance with section 21(1) for any period of annual leave due in terms of section 20(2) that the employee has not taken.” “Any period of annual leave” would seem to imply that payment must be made to the employee for all leave that they have not yet taken – irrespective of when it was accrued – last year, a year before, etc. This interpretation is reinforced by section 21(1). Section 21(1) states that the remuneration for the annual leave must be paid at the rate of remuneration earned at the time the leave was accrued – not in as many words, but that is what it means. Therefore, if an employee still had leave due to them that was accrued 3 years ago, the rate at which that leave is to be calculated would be the rate of remuneration earned by the employee at the time the leave was accrued.


The Main Collective Agreement of the National Bargaining Council for Hairdressing, Cosmetology, Beauty, and Skincare Industry (HCSBC) in clause 21.1.2 prescribes that “An Employer shall grant annual leave in respect of a previous leave cycle, up to but not exceeding 6 (six) months after the end of the leave cycle, after which the annual leave for the previous leave cycle shall be forfeited.”


An employer must grant annual leave equal to the number of days the employee would have been entitled to within a two-week period, not later than six months after the annual leave cycle.


Should there be any leave days outstanding after this period it must be paid to the employee by agreement between the parties.


Should the employee refuse to take annual leave when instructed by the employer, the leave will be forfeited six months after the leave cycle.


An employee is obligated to ensure that they take annual leave, and if not possible due to the operational requirements of their employers’ business, they should obtain a written undertaking from their employer regarding the future disposal of any annual leave owing – i.e., an undertaking from the employer to either permit the employee to take annual leave at a specific time or a written undertaking to be paid out.


Employers must introduce an annual leave usage policy – and particularly those employers who allow the accumulation of annual leave. There is an obligation on the employer to carefully monitor annual leave usage by employees – and to ensure that employees take their leave in accordance with the policy.


Moral – employees, take your leave when it falls due; for employers, ensure that your employees take their leave when they should.


Draft Annual Leave Policy

The number of days paid annual leave to which the employee is entitled as per the Main Collective agreement of the National Bargaining Council for Hairdressing, Cosmetology, Beauty, and Skincare Industry (HCSBC):


Every Employee except a Casual Employee shall be entitled, after 12 (twelve) consecutive months of service with the same Employer (leave cycle"), to 3 (three) weeks' leave on full pay. The 3 (three) weeks shall consist of 18 (eighteen) working days for a 6-day working week.


An Employee who has completed 5 (five) continuous years' service with an Employer, though not necessarily with the same Employer, shall be entitled, on completion of the 5th (fifth) year of employment, to 24 (twenty-four) working days leave, on full pay.


An Employer shall grant annual leave in respect of a previous leave cycle up to but not exceeding 6 (six) months after the end of the leave cycle, after which the annual leave for the previous leave cycle shall be forfeited.

Should a public holiday fall within the period of annual leave, then the employee shall be entitled to an extra day’s leave on full pay.


 The employee’s entitlement to annual leave will be reduced by the number of days of occasional leave on full pay granted to the employee at his/her request during a particular leave cycle.


The employee is obliged to request leave in writing and obtain permission to go on leave at least 4 (Four) weeks prior to taking annual leave. 


Annual leave will be granted to the employee when the operations of the employer allow for the absence of the employee, provided that leave will be granted not later than six months after the end of the annual leave cycle.


Annual leave may not run concurrently with any other period of leave (excluding unpaid leave) or a period of notice to terminate services.


The employee will not be allowed to work for the employer during a period of annual leave.

All annual leave must be taken within 6 months of the end of the leave cycle in which it accrued, and may not be accumulated or exchanged for payment, except upon termination of employment or as agreed by the parties.


The employer must grant annual leave equal to the number of days the employee would have been entitled to within a two-week period, not later than six months after the annual leave cycle.


Should there be any leave days outstanding after this period it must be paid to the employee by agreement between the parties.


Should the employee refuse to take annual leave when instructed by the employer, the leave will be forfeited six months after the leave cycle.


Annual leave shall be granted only at the discretion of the employer, as provided for in section 20 (10) (b) of the Basic Conditions of Employment Act.





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