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Thread: Annual Leave Pay for Regularly Absent Workers

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    Annual Leave Pay for Regularly Absent Workers

    Hi there

    I have a client who is paying her workers weekly, based on actual hours worked. So there is no fixed salary. She has a problem with the approaching annual shutdown and the associated annual leave pay. Some of her workers are often absent from work (unpaid leave) for long stretches of time. Yet her employment contract still provides for 15 working days of annual leave at full pay, per 12 month period.

    Now, clearly it's unfair to the employer to pay an employee who frequently doesn't show up for work the full pay for 15 working days. But that doesn't say anything about the legality.

    The BCEA does say that you can use 1 hour / day of leave per 17 hours / days worked, instead of the 15 days a year. But that's only by agreement and her employment contracts specifically state that 15 days are given at full pay, so I doubt this is a solution?

    There is also section 35(4) of the BCEA, which states that the past 13 weeks of pay may be used to determine the rate for leave pay where wages fluctuate significantly between periods. So, if the employee only worked half the days he should have, then the 15 days of leave will still be paid out, but now only at half the rate. Is it OK to do this?

    Does anyone have some legal ideas that can help make the situation more fair, or some comments about what I mentioned above? Any help is greatly appreciated!

    Regards,
    Dave

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    Gold Member Martinco's Avatar
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    Quote Originally Posted by Dave U View Post
    There is also section 35(4) of the BCEA, which states that the past 13 weeks of pay may be used to determine the rate for leave pay where wages fluctuate significantly between periods. So, if the employee only worked half the days he should have, then the 15 days of leave will still be paid out, but now only at half the rate. Is it OK to do this?
    I would think that this part of the BCEA applies to this situation unless your client belongs to a specific industry that determines otherwise.
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    Platinum Member sterne.law@gmail.com's Avatar
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    Leave is accrued according to time worked, it is not a lump sum payment so to speak. hence using teh calculation of 1 day per 17 days worked will suffice.

    As they have an hourly rate you need not take account of the averaging. Accure the leave at 1 hour per 17 hours worked multiplied by the rate and that is the amount of leave to pay. You have the payment amount and how many days due.

    She shoudl use the calculation method that mirrors the payment method. Hourly, daily, weekly or monthly.

    Averaging is normally used where the rate of pay fluctuates eg a worker gets different rates becuas ethy do different jobs or a commision based salary - you need a way to calculate pay because obviously payment on base salary is unfair
    Anthony Sterne

    www.acumenholdings.co.za
    DISCLAIMER The above is merely a comment in discussion form and an open public arena. It does not constitute a legal opinion or professional advice in any manner or form.

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    Thanks for the reply, Anthony. So what about the fact that the employment contract says "15 working days of annual leave at full pay, per 12 month period"? Can the 1 hour per 17 hours worked still be used, or will she have to sign a new contract with the employees?

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    Platinum Member sterne.law@gmail.com's Avatar
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    Because she is paying, per the contract, at an hourly rate that i steh method of remuneration and thus the method of payment.
    Although people will point to the clause that says it says 15 days per 12 month cycle, it can be deemed a mere oversight. The law, is quite clever at times (sometimes too clever that it confuses itself) and recognizes typo's etc and looks at overall intent. The rate and meethod of payment will be used to determine the correct method. The alternative is that granted I give you 15 days of leave becuase you have worked for 12 months BUT (clever law system to the fore again) the amount I pay you will be calculated using the moving average system - which in turn, mathematically, will equate to the 1 hour per 17 hours) In other words it would not be 15 days times 8 hours but 15 days X (average hours worked per 13 week cycle) All sums will lead to the same cash payment.
    Anthony Sterne

    www.acumenholdings.co.za
    DISCLAIMER The above is merely a comment in discussion form and an open public arena. It does not constitute a legal opinion or professional advice in any manner or form.

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    Dave A (02-Nov-10), Dave U (02-Nov-10)

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