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Revealed: The only way to ensure you have a watertight annual leave policy

by , 08 April 2014
You employees need to know what's allowed and what isn't when it comes to leave. If you don't make this clear, they'll simply plead ignorance and your business will suffer irreparable damage. The damage includes lost productivity and annual leave abuse. Don't let your company suffer. Make sure you have a legally sound annual leave policy that includes the following eight points...

If you want to ensure your annual leave policy is watertight, make sure it covers these important points

#1: Perspective

For starters, your company's annual leave policy must distinguish between the following leave classifications:

  • Annual leave;
  • Sick leave;
  • Family responsibility leave; and
  • Maternity leave.

To eliminate any confusion or misunderstanding, you must address each classification in a separate policy document.

#2 Annual leave entitlements

You must state the type of employees who are entitled to annual leave.

#3: Crediting of leave

You can, for example, say leave is credited monthly on a pro-rata basis.

#4: Leave arrangements

Here, you can, for instance, say that your company reserves the right to reject or refuse an employee's application and that this will depend on things like operational constraints.


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.

That's why I'm excited to introduce you to a resource that completely takes the stress and confusion out of managing annual leave in your company.


#5: Application for leave

You must have an Application for Leave' form and you must make it clear in your policy that employees must apply for leave in writing.

#6: Encashment of leave

Here, you must make it clear that no employee may be paid instead of leave being granted in terms of the Basic Conditions of Employment Act. You must say that the only exception will be on termination of employment.

#7: Calculation of employee's remuneration in terms of Section 35(5) of the Basic Conditions of Employment Act

Your annual leave policy must state the type of payments that you'll include in an employee's remuneration for the purposes of calculating pay for annual leave.

#8: Leave approval

You must also make it clear that employees shouldn't finalise their annual leave arrangements until you've approved their leave. This way you'll avoid a situation where an employee makes arrangements to go overseas, only to find out later that you haven't approved their leave due to your company's workload.

There you have it. If you cover all these areas in your annual leave policy, you can rest easy knowing that your policy is legally sound. This will in turn help ensure employees know what's allowed and what isn't and hopefully won't abuse annual leave.

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