ANNUAL LEAVE AND SHUTDOWN PERIODS

Question: “Is it fair that my employer subtracts the amount of days taken for our shutdown period from my annual leave?”

Answer: Yes, it is. However, the answer hasn’t much to do with the principle of fairness, but rather that of legality.

The following are the ground rules with regard to annual leave in terms of Section 20 of the Basic Conditions of Employment Act:

• Unless it has been indicated otherwise, employers must follow these ground rules unless a Main Agreement or Collective Agreement contains conditions that differ;
• The employee is entitled to 21 consecutive days of annual leave on full pay in every leave cycle. If the employee works a 5-day week then this will equate to 15 working days per annum, whereas if the employee works a 6-day week, it will equate to 18 working days per annum;
• A "leave cycle" is defined as a period of 12 months commencing from the 1st day of employment, or commencing from the end of the previous leave cycle;
• The number of normal working days that fall within those 21 consecutive days is the number of working days that the employee must be paid for;
• Annual leave is accrued, which means that the number of days to which the employee is entitled starts at zero and increases as the leave cycle progresses. For this reason, the employee would have zero days leave due to him/her at the beginning of the leave cycle.

There are two methods of calculating the accrual of annual leave. The first is where the employee accrues leave at a rate of one day leave for every 17 days on which the employee worked or was entitled to be paid. Therefore, Public Holidays as well as days where the employee was off on paid sick leave will be included in the calculation of the 17 days. However, this method may only be applied by agreement with the employee. If there is no other agreement has been concluded with the employee, then the accrual may be calculated whereby the employee accrues 1.25 days leave per month if he/she works a 5-day week, or 1.5 days leave per month if he/she works a 6-day week.

In terms of Section 20(10)(a), annual leave may only be taken by agreement between the employer and employee. And in the absence of such an agreement, annual leave must then be taken at a time that suits the employer [Section 20(10)(b)]. Therefore, in terms of the above-mentioned, the employer is entitled and encouraged to introduce a Company Annual Leave Policy, which states specifically that a certain period will be regarded as a “shutdown period”, and that employees are required to take their annual leave for that period of closure. So while it is not necessarily “fair”, it is still very much legal.