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How to manage outstanding leave balances

by , 20 November 2013
Untaken annual leave is a huge hidden expense for your company. And, with the end of the year in sight, it's important to manage outstanding leave balances correctly. Here's how...

Managing outstanding leave balances is easy if you have the know-how.

The Practical Guide to Human Resources Management explains that once you complete your leave audit, you need to make your employees take their outstanding leave so they'll be within the current leave cycle.

Remember, you can't pay your employee for the outstanding prescribed leave, unless you terminate employment.

So how do you ensure employees take their leave?

Manage outstanding leave balances by using these tips to make sure employees go on leave:

#1: Don't wait for employees or managers to decide to take leave. Be proactive and meet with each manager to schedule leave for affected employees. Be firm and don't allow your managers to make excuses.

Remind them that this is an unnecessary cost to the company. If they don't schedule leave within a reasonable timeframe (say one week), escalate the matter to senior management or schedule enforced leave for the employee(s) yourself.

#2: Don't be intimidated. You must send each employee on leave for at least 15 working days' in every leave cycle (or within six months thereafter). You can face hefty fines and penalties from the Department of Labour if you don't.

#3: Break up really big balances into smaller chunks within the current leave cycle or send employees on extended leave, if possible. It may be necessary to impose long leave on those employees with really big outstanding leave balances.

For example: Let's says Bafana has big outstanding leave balances. His manager could choose from a range of options to deal with his big leave balance. He could

  • Send Bafana on leave for the full 65 days in one go and organise a temp to do his work or reshuffle Bafana's workload during the period that he's away;
  • Send Bafana away for two weeks of each month for the next six months. This might be viable if the company has high and low periods of activity and another employee can stand in for Bafana during the periods of low activity;
  • Send Bafana on, say, a months' leave and then arrange a period of shorter work weeks with Bafana until he uses the outstanding leave up. For example, Bafana might go on leave for four weeks (20 working days) and only work Monday to Wednesday for the next six months.

#4: Tackle smaller outstanding leave balances as soon as possible. This way they'll have far less impact on your daily business activities.

For example: Sibongile's manager could choose from a range of options to deal with her small leave balance:

  • Send Sibongile on leave for the full four days in one go and bring in a temp to do her work or reshuffle the workload during the short period that she is away;
  • Extend Sibongile's leave for an extra four days when she takes her current leave entitlement;
  • Arrange for four 'long weekends' where Sibongile will take a Friday or a Monday off over the next few months.

Knowing how to manage outstanding leave balances will help ensure you comply with the Basic Conditions of Employment Act (BCEA). And most importantly you'll save your company thousands when your employees take their outstanding leave.

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