Leave due on termination of employment

[duncan2011]

I have resigned from my employer with 10 days of annual leave not taken.

My monthly salary consisted of;
-Salary
-Medical aid contribution
-Travel allowance

How do I calculate the amount owed to me for the leave?

Thanks for your help!
Duncan.

[Martinco]

Well.........I stand to be corrected but your complete package should form the basis of the calculation. I.E. Salary + Medical + travel allow.
The calculation should then be 10/21 * total monthly salary as per above.= Leave pay

[sterne.law@gmail.com]

You will only recieve pay on salary.
Travel allowance and medical aid are benefits and are therefore not a part of remuneration.

[duncan2011]

Thank you Sterne.law,

Are you sure about this?
I have since found the following at http://www.labourprotect.co.za/remuneration_def.htm


Payments included for the calculation of Remuneration:
When calculating an employee’s pay for annual leave, payment instead of notice or severance pay, the following payments are to be included in the calculation of remuneration:
- cash payments (any cash payments made to an employee);
- housing or accommodation (the value of a housing or accommodation allowance or subsidy received as a benefit in kind);
- car (the value of a car allowance, except to the extent that the car is provided to enable the employee to work);
- employer contributions (employer’s contributions to medical aid, pension, provident fund or similar scheme; to a funeral or death benefit scheme);
- payment in kind (any other payment in kind received by the employee).

In short, when calculating the employee’s remuneration, the cost-to-company of the employee must be used.

Payments NOT included for the calculation of remuneration
- Any cash payment or payment in kind provided to enable the employee to work (for example, an equipment, tool or similar allowance or the provision of transport or the payment of a transport allowance to enable the employee to travel to and from work);
- A relocation allowance;
- Gratuities (for example, tips received from customers) and gifts from the employer;
- Share incentive schemes;
- Discretionary payments not related to an employee’s hours of work or performance (for example, a discretionary profit-sharing scheme);
- An entertainment allowance;
- An education or schooling allowance;
- Allowance paid for property owned by the employee


So now it's a little confusing. According to the above Medical contributions are included.. the "travel" (ie not car) allowance is still unclear to me...

[Dave A]

I suggest the labourprotect site does not adequately differentiate between payment of balance of annual leave and payment in lieu of notice.

Frankly the claim on elements of severance pay seems presumptious too as it is quite common that the precise terms of severance pay are negotiated.

I believe Anthony's answer to be correct i.r.o. the OP as presented.

[Martinco]

Sorry, I have given the wrong information. I have spoken to my HR guy and he confirms that you only calculate leave pay on actual salary. So I have been doing it wrong all the time.
So, Anthony is 100% correct.

[Dave A]

At least the discussion means you'll save yourself some money in the future, Martin

[Martinco]

Yes, but not much as I do not have a significant staff turnover. So not much lost !

[sterne.law@gmail.com]

The labourguide post refers-
The error here, which occurs often is the use of a section of the act which needs to be referenced to other sections.
The leave calculations referred to are ito S21, S38 and S41 which are where you are taking your leave in the ordinary scope of work, where the employer opts to pay you out in lieu of working a notice period and severance(retrenchment). By not specifically mentioning leave pay in terms of being paid out what is due on departing, we can intepret it to not be included in the calculation methods. The exclusion is specific.

Remuneration and cost to company calculations are unsettled issues. Labour law and tax law use different definitions and applications.
It is also unsettled as to what is a benefit and what is not.

[tec0]

If I may take this into another direction, what would the payout be if there was no employment contract and the person was fired?

Additional information:

• Person was employed for longer than 6 months.
• Person had no employment contract bud did requested for one.
• Person also paid in tax regardless of the fact that there was no contract.
• Person had to pay for her/his own medical and retirement fund.
• Person never received payment for overtime during employment.

What can this person expect, her/his employment was terminated as they “the employer” didn’t need her/him anymore.

[duncan2011]

That sounds familiar - must be the same company!

[tec0]

That sounds familiar - must be the same company!

There are a lot of sharks in the fishbowl lately... It is one thing not to give a person a contract it is something entirely different to expect a person just to stand up and walk without any compensation after 6 month of working late giving their 110%

Still it would be interesting to see the options this employee has to her/his disposal.

[duncan2011]

...what would the payout be if there was no employment contract and the person was fired?

Hi tec0,

I would assume you have to be employed, or at least deemed to be employed, in order to be fired.

What type of tax was paid?

I'm no expert in this - However, I do know that one cannot be a contract / temporary worker forever without being automatically deemed as an employee in the eyes of the law. With or without an empolyment contract - one's rights are protected. The Basic conditions of employment act is not too difficult for the layman to understand (i should know!) - sifting though that would be a good starting point.

http://tiny.cc/wl08a