Can annual leave expire? Can a business forfeit an employee’s annual leave?
The answer is YES, and there are two circumstances under which you can do it:
1. Accumulation of Too Much Leave
If an employee has accumulated additional leave days over and above the amount of leave days allocated to him or her by the company in a year, the company is entitled to forfeit these additional days. So for example, if the company gives an employee 15 days annual leave per year and the employee has accumulated 35 days in total over a few years, then the company is allowed to take away the extra 20 days. But…
…you must give the employee fair warning that you are going to do this. Otherwise you’ll have an extremely angry employee on your hands. And understandably so.
Allow the employee a reasonable period of time to plan and take this leave, after which you will forfeit it!
Remember to apply this fairly to all employees that are in the ‘same boat’. And also include it in your company’s Leave Policy.
2. Expiry of Annual Leave Days
Your Company gives employees a certain number of day’s paid annual leave per year. According to the BCEA, the minimum is 15 days annual leave. If at the end of an employee’s leave cycle (12 months) the employee has not taken all these 15 days leave, the left over days usually accumulate. In some cases this accumulated leave builds up year after year.
The Basic Conditions of Employment Act says that when an employee has not taken all their annual leave during the leave cycle, he or she has six months after the end of the leave cycle in which to take it. It’s the employee’s responsibility to plan and take this ‘left over’ leave. If they don’t take it after the six months, these extra days of annual leave will expire and the company can take them away.
If you as the business owner are going to implement this practice in your business, then it is wise to let your employees know that this is going to happen (do this long before you put it into practice). Also, put it into your company’s Leave Policy and in your employment contracts as well.
For advice and support on how best to go about the forfeiture of employee’s annual leave or updating employment contracts and even putting a Leave Policy in place, here’s how you can get access to my personal input CLICK HERE.
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