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When conducting your next HR audit, make sure your company's annual leave policy explains these six factors

by , 06 April 2015
An HR audit, like a financial one, is something you should do at least once a year.

While this isn't common practice, auditing your entire HR system regularly is the very best way to ensure all your processes, HR policies and procedures are in line with new labour laws.

Here's what we suggest you look at when your HR audit puts the spotlight on your company's leave policy.


Auditing your company's leave policy? Consider these six factors 

According to the experts behind the Human Resources for Managers Loose Leaf Services, you need to check your company's leave policy considers the follow:
1. Shut down periods 
If you have a shutdown period, warn employees that it's their responsibility to ensure they have enough leave days to cover the full annual shutdown period.  
Remind your employees that if they don't have sufficient annual leave days available to cover the full annual shutdown period, the number of days short will be unpaid leave.
2. Who approves the leave?
All annual leave is subject to management approval. You're not obliged to approve annual leave every time the employee asks.  
Your policy must make this clear. To do this, include the wording: 'Management reserves the right to refuse any request for annual leave and leave is granted at the discretion of the employer,' in your annual leave policy. 
3. When you can pay out leave days 
Legally you only have to pay out leave days when your employee resigns, you dismiss him, you retrench him, he dies or he retires. If you pay out other forms of leave, make sure your leave policy clearly explains how you treat it.
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4. Check in with labour law changes
Make sure your annual leave policy complies with labour laws. Also ensure the conditions are reasonable and you can legally enforce them.
5. Make sure it protects your employee's rights to leave
Remember that it's illegal to require or allow an employee to do any work while on leave, whether annual leave, sick leave, family responsibility leave, unpaid leave or maternity leave. You also can't ask them to be "on standby" during any period of leave.
6. Explain your policy on crediting annual leave days if your employee falls ill while on holiday
When an employee falls ill during his annual leave and produces a valid medical certificate to prove the sick days, many companies choose to convert those days to sick leave. But this isn't legally necessary. As long as your leave policy states your company stance on this issue, you'll be protected. 
So there you have it. And just remember that if you change anything in your leave policy after you do your HR audit, you must get your employees to sign the new policy for you to be able to effect it. 
PS: Get all your annual leave questions answered here:
Compiled by our labour and HR experts along with the team that gave you the Labour Law For Managers Handbook, The Ultimate Guide to Annual Leave answers the trickiest annual leave questions clearly and accurately so you're never stumped again.
 Questions like…
  • How do I deduct employees leave for annual shut down?
  • Can you pay out your employees instead of granting paid annual leave?
  • What's the rule about taking annual leave during notice periods?

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