The Basic Conditions of Employment Act (BCEA) regulates annual leave in South Africa. The BCEA provisions for annual leave do not apply to employees who work fewer than 24 hours per month for an employer. Additionally, these provisions do not cover any leave granted beyond the BCEA's stipulated entitlements.
The BCEA's annual leave provision accrues at 1.25 days per month for a five-day work week and 1.5 days per month for a six-day work week. A common question is how much of an employee's accrued leave should be paid if they are dismissed or resign. This issue was clarified in the recent judgment of Hartley v SMD Trading Group CC (D138/21) [2024] ZALCD 16 (26 June 2024).
The applicant claimed he was owed 73 days of leave pay upon termination of his employment. In contrast, the respondent argued that he was only entitled to 15 days of leave pay, which was subsequently paid out. Section 20(1) of the BCEA defines an "annual leave cycle" as 12 months of employment with the same employer, starting from the employee's commencement of employment or the completion of the previous leave cycle.
According to Section 20(2) of the BCEA, an employer must provide an employee with at least 21 consecutive days of annual leave on full remuneration for each annual leave cycle. Finally, Section 20(4) of the BCEA stipulates that an employer must grant annual leave no later than six months after the end of the annual leave cycle. It is not permissible to pay an employee in lieu of taking leave, except in the case of termination of employment, when an employee shall be paid for any annual leave not taken that is due in terms of Section 20(2) of the BCEA.
The 15 days of leave entitlement, regulated by the BCEA, cannot accrue beyond six months after the end of a leave cycle. This is stipulated in Section 20(1), read with Sections 20(2) and 20(4) of the BCEA.
Judge S. Snyman, Acting Judge of the Labour Court of South Africa, stated the following in his judgment:
"The purpose of guaranteed annual leave afforded to employees in terms of the BCEA was never intended to constitute some kind of piggybank for employees to utilise to generate a lucrative cash pay-out when leaving employment. The purpose of affording employees guaranteed leave is to have the opportunity of guaranteed rest and recuperation, which in turn would protect their employment and enhance workplace safety and efficiency placed at risk by a fatigued employee. Employees must know that they must take their leave, or they will lose it. That way, they will be motivated to enforce their rights, take their leave, and the objectives of the BCEA will be achieved."
The judgment confirms that any statutory leave not taken within six months after the end of each leave cycle will be forfeited by law.
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