Please note that this pertains to the South African Labour Relations and Best Practice requirements.
I promised that we would have a look at the subject of accumulation of leave.
This is not a good idea people – not good for the Business at all! Actually the Letters and Contracts of Appointment that I have, deals very clearly with this point. Let’s examine why it is not a good idea and then I will let you know how I deal with it in the employee contracts.
So George has been working for Mike now for a period of 17 years. Both George and Mike are very ‘proud’ of the fact that George has not taken a single days worth of leave in that entire time. The perception of course is that George is so dedicated to his work that he will sacrifice himself in order to make sure that the business works . . . well! Seventeen years – that’s a long time not to take leave, in fact it is a whopping 255 days leave that is due to George – almost 9 months worth of leave due! Incredible wouldn’t you say? Well not for me, I would say “EEEeeeeeeekkkkk! Houston we have a problem!”
Let’s have a look at the real reason that George has not taken leave. You see, personally I don’t believe that anyone could be that dedicated! Even people who own their own Businesses or work for themselves take a break from time to time and there is anyone ‘dedicated’ to what they do, it’s them. Wouldn’t you agree?
One of the biggest frauds that I have come across in my career as Internal Auditor (a career that spans more than 35 years, I might add) ‘popped’ up when we put a stop to all overtime and insisted that people within the organization took their leave. You see, the people who are committing fraud, or who (as in this case) were ‘in charge’ of all the people that they had coerced into committing the fraud, had to be around in case a question or two was asked – so that they could cover their tracks, make the appropriate excuses or make a timeous exit, should the need arise.
That is one of the reasons that the Basic Conditions of Employment Act is quite specific about leave and how it should be taken. Taking a day here or there doesn’t cut it. Your employees need to take their leave in blocks/weeks/chunks or any other way you would like to describe it.
Let’s be reasonable, apart from anything else, everyone needs a break, everyone needs to rest and honestly speaking, you are not doing yourself or your business any favours by having people around that are dog tired. Contrary to popular belief, they do not work to their best capacity and neither do you. So let them take their time off and make sure that you do too.
So that’s the first reason that your staff MUST take leave – let’s have a look at some of the others.
Although George has been with Mike for seventeen years now, he has been headhunted by Mike’s rival company. Apart from anything else, they are prepared to give George, double the salary that he is earning right now and they are also going to throw in a car, a petrol allowance and a cell phone. George of course, being the loyal employee that he is turns down the offer! Yeah right! George hands his resignation in so quickly, it’s written and handed in before Mike can even blink!
Think about this one for a moment – Mike now has to “pay out” the 255 days leave that he owes George and get this – it’s not at 15 days at the rate that George was paid in the first year and then 15 days that George was paid in the 2nd year and so on. It is 255 days at George’s current rate of pay! What exactly do you think that this is going to do to Mike’s cash flow, presuming of course that he has one?
This is the kind of stuff that ‘closes’ businesses down – fast.
In the employment contracts that I use, it is stipulated that employees have to take a minimum of 80% of their leave as at 31 December of each year. The balance of 20% may be accumulated until 31 March of the following year and if not taken by then is forfeited by the employee.
As you can see, it is in your own best interests to ensure that your employees take their leave every year – all of it.
Next week, we will look at a whole new topic!