FORFEITURE OF ANNUAL LEAVE – USE IT OR LOSE IT?
Section 20(4) of the Basic Conditions of Employment Act 75 of 1997 provides that an employer must grant annual leave not later than six months after the end of the annual leave cycle. Annual leave cycle is defined as the period of 12 months’ employment with the same employer.
What happens if an employee does not take their leave by the end of the six months? Do they lose it, or accumulate it to use at a later stage?
The court in Ludick v Rural Maintenance (Pty) Limited [2014] 2 BLLR 178 (LC) provided clear authority in this regard. In Ludick the court had to determine whether an employee who had worked for an employer for 27 months and had not taken any annual leave during this period was entitled to be paid upon termination of his employment in respect of all annual leave that had accrued to him over the two annual leave cycles.
In the circumstances, Van Niekerk J followed a prior decision Jooste v Kohler Packaging Limited [2004] 25 ILJ 121 (LC) which had held that claims for accrued annual leave pay upon termination are limited to annual leave not taken in the current annual leave cycle and the annual leave cycle immediately prior to the current annual leave cycle.
In this regard Van Niekerk J cited that, “Section 20 of the BCEA contemplated that claims for the value of accrued leave are limited to statutory annual leave accrued in the current and immediately preceding leave cycle. An employee does not forfeit that leave or any claim to its value if for whatever reason, the leave is not taken in the six months period contemplated by s 20(4)”.
As such, from the authority of the Labour Court it can be ascertained that annual leave from the current annual leave cycle and the immediately preceding leave cycle is not forfeited. Thus, in the absence of an employment contract or policy to the contrary, all statutory annual leave from prior annual leave cycles is forfeited.
Employers should note that this only applies to statutory leave granted to employees in terms of the BCEA. Any leave in excess of the statutory minimum is deemed to be contractual leave and is not regulated by the BCEA.
Accordingly, employers who grant leave over and above the statutory minimum are advised to conclude agreements dealing with the accumulation or forfeiture and/or payout of such contractual leave, in order to avoid contractual claims being instituted.
For professional legal advice, contact Tracey Mouton, MD, Goldberg & de Villiers Inc. on 041-5019800 | traceym@goldlaw.co.za