Please note that this pertains to South African Labour Relations and Best Practice requirements.
Ok, here we go – now we have exactly what the Act says, now let’s find out exactly what it means!
Let’s get my favorite protagonists back. George the employee and Mike the employer.
George has been working for Mike for almost a year now and it’s time for him to take some leave. George is reluctant to take leave as he is really in need of some additional finance. The roof of his house in Soweto has blown off and he needs the additional finance to do the repairs. Mike, on the other hand, can’t really do without George because he has landed a deal that has stretched his resources really thin. So they come to a compromise – George has requested that Mike pay him out for his leave and since Mike has the new deal he is in a financial position to pay George for the leave that he does not take!
Sounds like a win, win situation doesn’t it? Look again!
Firstly the only person to really win out of this situation is SARS – you see the extra finance in George’s pay packet means that he has gone into the next tax bracket, so he is actually paying more tax out to SARS than the leave pay is actually worth.
Secondly, although George now has the additional funds that he needs to repair his roof – the additional work, without him taking a rest, means that his body and his mind are tired and it will be a whole year before he can actually take some time out again. His judgment is slow, his reflexes are slow and he is not only putting himself at risk but also his workmates because he could actually be the cause of an accident.
Thirdly, although Mike has been able to complete his project on time, George will probably only be half as productive as usual for the rest of the year because he has not had time to rest.
Finally, if the Department of Labour or the CCMA found out that Mike had paid George’s leave out – Mike could be in serious trouble and face a huge fine for not obeying the law.
The only time it is legal for Mike to pay George out his leave pay is if George resigns, is dismissed, retires, or is retrenched – then all of the leave pay would need to be paid out in full.
Next week let’s have a look at the accumulation of leave.