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Can you pay Sam out instead of granting him annual leave?

by , 05 November 2014
Let's say your employee, Sam asks for annual leave.

But due to the fact that you're busy and are already operating on skeleton staff, you decide to refuse his leave and pay him out instead.

Before you make your decision, read on to find out whether or not it's legal to pay Sam out instead of granting him annual leave so you don't find yourself on the wrong side of the Basic Conditions of Employment Act (BCEA.)

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No, you CAN'T pay out Sam instead of granting him annual leave

Experts behind the Labour Law for Managers Loose Leaf Service explain that the BCEA specifically states that you may NOT pay out an employee instead of granting paid leave (except on termination of employment).
Please note that if your employee is going on maternity leave and she'll return to work after this period, you also can't pay out annual leave.
In addition, when you terminate your employee's employment for whatever reason, you must pay out all accrued leave and not only in circumstances where an employee has resigned.
Remember, you must grant your employees annual leave not later than six months after the end of the annual leave cycle. And annual leave must be taken according to an agreement between you and your employees or, if there is no agreement, at a time you determine.
The bottom line: You can't pay out your employee instead of granting him annual leave.
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The guide will:
  • Help you create a water-tight leave policy,
  • Help you know your rights and responsibilities,
  • Give you step-by-step instructions on managing annual leave effectively, and
  • Give you tips and tools to save you the most time and money.

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