UNDERSTANDING ANNUAL LEAVE - HOW IT WORKS & WHY REGULATION MATTERS

Annual leave is one of the most important statutory entitlements provided to employees under South African labour law. Proper management of this benefit is not only essential for compliance with the Basic Conditions of Employment Act (BCEA) and the Main Collective Agreement of the National Bargaining Council for Hairdressing, Cosmetology, Beauty, and Skincare Industry (HCSBC), but also critical to maintaining operational efficiency and workplace wellbeing.

How Annual Leave Is Accrued

Leave entitlement is accrued over a 12-month leave cycle, which begins from the employee’s date of employment commencement. Annual leave shall fall due on the first working day after completion of each leave cycle. For example, employees working 6 days a week are typically entitled to 1.5 days of leave per month worked, giving them 18 paid leave days over a 12-month cycle.

The Leave Cycle and Carry-Over Period

The leave cycle runs from the date of commencement to the same date the following year. For instance, if an employee started on 1 March 2024, their leave cycle would end on 1 March 2025, by which time they would have accrued 18 paid leave days.

If the employee does not take all their leave within the 12-month cycle, any unused leave may be carried over for a maximum of six additional months. If the leave is still not taken by the end of that six-month grace period, it is forfeited and may not be claimed later subject to certain provisions within the main collective agreement.

Despite the new leave cycle starting as normal, employers may find themselves carrying over unused leave from the previous cycle, creating administrative and financial complications.

Why Employers Must Regulate Leave

Failing to regulate leave effectively can pose serious risks to your business, including:

• Accumulated financial liability due to excessive accrued leave.

• Operational disruptions if multiple staff members request extended leave simultaneously.

• Burnout and reduced productivity, as employees are not encouraged to rest and recharge.

To prevent these issues, it is strongly recommended that employers adopt a clear leave policy. A good practice is to limit the number of carried-over leave days (e.g. a maximum of 5 days into the new cycle), promoting regular time off while reducing long-term liability.

Leave Taken in Advance – What Employers Must Know

It is common for employees to request leave in advance of it being accrued. While this may be granted at the employer’s discretion, it must be done in writing.

The written agreement should clearly state that:

• The leave is granted in advance.

• If the employee resigns or is dismissed before working back the days taken, the value of the leave will be deducted from their final remuneration payment.

• The employee consents to this deduction in line with Section 34 of the BCEA, which governs lawful deductions.

Without such a written agreement, the employer risks making an unlawful deduction, and the employee may succeed in a dispute if they challenge it.

Annual leave is not just a legal requirement—it’s a critical part of employee wellbeing and business continuity. Employers are encouraged to:

• Monitor and enforce annual leave usage.

• Create a clear, written leave policy.

• Handle advance leave responsibly and lawfully.

By doing so, businesses can avoid disputes, promote healthier work environments, and manage leave-related costs more effectively.