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Annual leave in focus

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An annual leave cycle is a period of 12 months with the same employer, calculated from the employee’s commencement of employment, or from the completion of that employee’s previous leave cycle. According to the provisions of Section 44 of the Employment Act (2000), if an employee works a five-day week, then this is equal to 15 working days or, if the employee works a six-day week, then it is equal to 18 working days. In other words, If the employee is working a five-day week, then the annual leave will accrue at the rate of 1.25 days per month, and if the employee is working a six-day week then the annual leave will accrue at the rate are of 1.5 days per month.

Nevertheless, the notion of forced annual leave is not uncommon in Malawi, with many employees often requested (even required) to take annual leave on certain circumstances. Employers are legally permitted to require employees to take annual leave if certain conditions are met. However, this does not bestow a unilateral right on an employer to send an employee on annual leave.

The employer, however, can direct an employee to take annual leave, but only if the request is reasonable. A requirement to take paid annual leave may be reasonable if, for example, the employee has accrued an excessive amount of annual leave; or the employer’s enterprise is being shut down for a period.

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A common business problem for employers occurs when employees accrue excessive amounts of annual leave. This scenario is detrimental to both the employees and the organisation, but both sides being ‘at fault’ may be the cause.

One potential cause over accumulated excess annual leave is organisation downsizing, thereby requiring ‘more from less’ from the remaining employees. The business does not maintain sufficient staff to cope with employees being absent for weeks while on annual leave.

Manager s may overtly, or covertly, place pressure on employees not to take leave because “we will not be able to cope at that time”. Employees then fear that no-one is likely to do their work while they are on leave and that they will return to a huge backlog and have to work long hours to catch up.

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On the other hand, many employees choose to hoard their leave entitlements. Some others may fear for their job security and try to accrue a large untaken leave balance that will be paid out if they are retrenched or dismissed.

Some employees may resist taking their annual leave because they have “skeletons in their closet” and fear that, if they take any more than a brief period of leave, a co-worker will relieve their position and either show up their poor job performance or discover some “time bombs” that the employee has been trying to conceal. Others try to make themselves indispensable (and therefore protected against redundancy or dismissal) by not taking leave so that no-one else is trained to do their job or able to relieve in it.

When leave is taken or paid out, the rate of pay is the current one at the time the leave is taken or paid, not the time at which it was accrued. This becomes an extra up-front cost for the employer that will reduce any of the potential cost savings (e.g. from not using casual employees as relief staff).

What about forcing an employee to take annual leave during a temporary shutdown?

It is important to stress that a temporary shutdown is not the same as going out of business. A temporary shutdown can occur where an employer temporarily shuts down its workplace, typically during slow business periods. For some businesses, particularly in manufacturing or offices, this may occur at the end of the ‘season’ or financial year.

An employer can require an award-free employee to take annual leave during a period of temporary shutdown; however, the requirement must be reasonable.

The factors that can be taken into account in the consideration of what is reasonable are: the needs of both the employee and the employer’s business; any arrangements made between employer and employee; the timing of the direction to take the annual leave; and the reasonableness of the period of notice given to the employee to take leave.

Nevertheless, the employer must not place undue pressure on employees to take leave. A step managers could take is to consult with employees to prepare an annual leave plan each year. Employers must always let their employees know what is going on and keep them in the loop as much as possible. If an employer is planning on temporary shutdown, they must give reasonable notice to their employees.

If you think your enforced taking of annual leave is “unreasonable”, contact your HR Professional for advice.

*The author is a Human Resources Practitioner and he writes on Labour Relations.

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