Leave and Leave cycles. Labour Guide Case Law: 2014-03 By Advocate Nicolene Erasmus Ludick v Rural Maintenance (Pty) Ltd [2014] 2 BLLR 178 (LC) The plaintiff was employed by the defendant from 5 January 2004 until 1 April 2006. The plaintiff claims the value of leave accrued over two leave cycles. The defendant contends that in terms of the plaintiff’s employment contract, he forfeited that leave. The points to be determined are these: (a) Did the plaintiff forfeit the annual leave accrued by him during the annual leave cycle that commenced on 5 January 2004? (Leave cycle 1) (b) Did the plaintiff forfeit the annual leave accrued by him during the leave cycle that commenced on 5 January 2005? (Leave cycle 2) Clause 7.10 of the plaintiff’s employment contract provides: “Paid leave entitlement shall be fifteen (15) work days for each completed twelve (12) months of service, to be taken at the convenience of the Company. Leave not taken within thirty (30) days of financial year end shall lapse”. Since the defendant’s year-end is 28 February, clause 10.7 of the contract, therefore, required the plaintiff to take the leave accrued by him in the previous leave cycle by no later than 30 March of each year, ie a period of some three months after the completion of the leave cycle. The plaintiff took no leave during the two leave cycles that are in issue and was paid on a pro-rated basis for leave accrued between 5 January 2006 and the date of termination, 1 April 2006. The effect sections 20 and 40 of the BCEA, the court held, is that on termination of employment, an employer is obliged to pay to an employee his or her full remuneration in respect of annual leave accrued but not granted before the date of termination, together with a pro rata amount in respect of the then current leave cycle. Theoretically, a case such as the present should not arise, since the Act assumes that employers grant employees their annual leave in accordance with section 20. Be that as it may, that is not what occurred in the present instance. In Jardine v Tongaat-Hulett Sugar Ltd [2003] 7 BLLR 717 (LC), it was held that section 20(4) of the BCEA seeks to protect employees who might otherwise be denied leave. “It imposes an obligation on the employer, enforceable at the instance of the employee. It does not impose an obligation on the employee to take leave within six months after the end of the annual leave cycle. Leave not taken within six months is not automatically forfeited.” In Jooste v Kohler Packaging Ltd (2004) 25 ILJ 121 (LC), the court held that the pro-rated payment in respect of a current leave cycle aside, section 40 of the BCEA contemplates payment only in respect of leave immediately preceding that during which the termination takes place. He did so on the basis that an employer may not refuse an employee leave, and that the Act contemplates that leave will be taken. To permit payment in respect of prior leave cycles would be to permit both the employer and employee to circumvent the Act. Dealing with leave cycle 1, the court held that there is no good reason why Jooste should not be followed and claims for the value of accrued leave be limited to annual leave accrued but not taken in the current and the immediately prior leave cycle (leave cycle 2). Ludick was therefore not entitled to be paid for the leave not taken in leave cycle 1. In relation to leave cycle 2, the accrued leave could have been taken six months from 6 January (by 6 July), but for clause 10.7 of the contract, which had the effect that leave had to be taken within three months of the end of his particular leave cycle, or it would be forfeited. The question is whether an employer may stipulate that an employee forfeit any annual leave not taken by a date that falls short of the six-month period contemplated by the Act. The answer is no. For assistance: Gerhard Rothmann Labour law Mobile : 071 898 3800 F2Email : 086 214 5534 [email protected]
Posted on: Wed, 19 Mar 2014 09:04:13 +0000
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