COVID-19: THE ACCRUAL OF ANNUAL LEAVE DURING LOCKDOWN, SOUTH AFRICA

By Leila De Saude,Melissa Cogger Thursday, April 23, 2020
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The national lockdown has had profound effects on working life in South Africa.

Employees in essential services are continuing to work, but under strict health and safety requirements; and employees who can work remotely, now work from home. The lockdown has therefore inevitably changed the circumstances and certain of the terms and conditions of many employees’ employment.

Then there is the category of workers who are not working. These are the workers who are not in essential services or who cannot work remotely. The no-work-no-pay principle applies to this category of worker.

In an effort to mitigate the effect of the no-work-no-pay principle, some employers have, however, continued to pay their employees’ salaries, or a portion thereof, or are requiring employees to take their annual leave.

For many, the C19 TERS benefit that has been established by Government is their only recourse.

This newsflash addresses the impact of the lockdown on annual leave, in particular the accrual of annual leave.

Do employees continue to accrue annual leave during the lockdown period?

In relation to employees in essential services and those who are working remotely, the answer is simple: yes, they continue to accrue leave.

The issue is somewhat more complex in respect of employees who are not able to work during this time.

The BCEA provides that an employee is entitled to a minimum of 21 consecutive days’ paid annual leave (about 15 working days) in respect of each annual leave cycle, being a period of 12 months’ employment with the same employer.

If an employee’s employment contract entitles her/him to a specified number of days’ leave per annual leave cycle, the employee accrues annual leave irrespective of whether s/he works or is entitled to be paid. (Thus, annual leave would accrue during a period of unpaid maternity leave or paid sick leave.)

In these circumstances, the employee would accordingly continue to accrue annual leave during the lockdown, even though s/he did not work and was not paid.

In terms of the BCEA, an employer and an employee may agree an alternative method of determining the annual leave entitlement, namely one day’s leave for every 17 days worked or for which the employee was entitled to be paid, or one hour’s leave for every 17 hours worked or for which the employee was entitled to be paid.

Thus, if the employment contract regulates the employee’s annual leave entitlement in terms of this formula, the employee would not accrue annual leave during the lockdown.

In the event that employees and employers agree to a reduction of working hours together with a correlating reduction in pay during, or after, the lockdown period, employers should also consider the treatment of annual leave.

The parties could potentially reduce the employee’s annual leave entitlement proportionately to the reduction in hours worked (but not below the BCEA threshold), or they could agree that the annual leave entitlement shall remain unchanged.