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John's resigned - but you still have obligations when it comes to his leave

by , 20 March 2015
John's been an asset to your company since the day you hired him. Now he's decided to take his expertise and apply them elsewhere.

You're sad, but you know that John will do well wherever he goes.

While you wrap up everything you need to do with him before his last day, don't forget to take into consideration these vital elements when it comes to his leave.

Here's what you need to remember...


You have two legal obligations when it comes to leave and an employee who's resigned 

Leave requests: Here's how you need to handle them
The Basic Conditions of Employment Act (BCEA) makes it very clear that NO employee may take annual leave while he's serving his notice period. If he needs to take leave, he must be unpaid. Whether you grant it or not is solely at your discretion. 
But what happens if John is sick and needs to take sick leave? Or if his daughter comes down with chicken pox and he needs to stay at home with her?
In the case of sick leave and family responsibility leave, the BCEA is on your employee's side. You must grant him these days if they're still available in is current leave cycle. In this case, both must be paid for by your company. 
That's just the first of your two legal obligations…
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An ineffective leave policy could cripple your business from right under your nose
Did you know that not forcing your employees to take their annual leave could end up costing you anything up to R15 000 per employee?
That's right - employees that don't take leave could be costing you just as much as those that abuse it.
That's because any leave that's accrued into the following financial year will increase the leave bill for your company and therefore severely affect your organisation in the long run.

Calculating leave: Do this before you pay John's last pay cheque

The other thing you need to do is calculate how much untaken annual leave John has and pay him for it. 
The Labour Law for Managers Loose Leaf explains how to do this:
Step #1: Find out how many days of untaken annual leave John has in the current leave cycle. If, for example, your employees get 15 days of leave per leave cycle and John's last day is the 30th of April, use the following formula to work out how much leave John is entitled to for the first four months of the year:
(4 months divided by 12 months) x 15 days' leave (full allocation) = 5 leave days. 
Step #2: Double check all of John's leave for the year has been deducted correctly. Make sure that any days John's taken have been deducted. (For the purpose of this article, we'll assume John hasn't taken any leave in 2015.) 
Step #3: Work out how much you owe him. Ask payroll to provide you with John's current daily remuneration. Then calculate the value of untaken leave that you need to add to his final pay cheque. 
Use this formula to work it out:
Daily remuneration x number of untaken days
If, for example, John earns R533, you'll owe him: R2 665 in untaken leave. 
There you have it. The two things you need to know about leave and the legal obligations you have to employees who've resigned. 

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