+27 21 556 1075

Entitlement to Accrued Annual Leave on Termination of Employment – Court Judgement

Is an employer bound by its own changes to its leave policy? What happens when the employer disputes whether the changes were ever implemented, and there is no witness to deny or contradict claims of what happened a decade or so ago?

The Labour Court had to consider this and other interesting issues in deciding whether an employee had a legal entitlement to accrued annual leave upon termination of employment. The judgment confirms the importance of employers taking special care in clarifying employee entitlements in their employment policies. It also highlights the importance of maintaining a record of the implementation and communication of salient changes.

The employee in Bester v Selfmed Medical Scheme (judgment delivered 31 July 2018) claimed she was entitled to over 200 days annual leave at the termination of her fixed-term contract. Her salary advice, or payslip, recorded this as the number of annual leave days due to her. The employer declined to pay the leave days claimed. It disputed whether the original terms and conditions of employment were in fact amended by a subsequent policy.

The employee testified about the changes to the standard terms and conditions of employment brought about by the board adopting a new leave policy in 2005. The employer’s witness was not in the company’s employ at that time and was unable to refute salient facts supporting the implementation of the policy. The policy entitled employees to accumulate 50% of their annual leave allotment.

The court confirmed the general position in respect of resolving disputes of fact. The technique of resolving disputes of fact will not be elaborated here, save to say that the court must make a finding on the credibility of the factual witnesses, their reliability and the probabilities.

In this instance, the court upheld the employee’s claim for payment of her accumulated annual leave payable upon termination of employment.

Importance of records

What value should employers take from this annual leave judgment? Critical to any business’s long-term ability to manage employment disputes is sound record-keeping. Where changes are made to terms and conditions of employment, new policies introduced or work practices amended, proper records should be maintained and preserved. Keeping detailed records will assist the employer in dealing with disputes long after the current role-players have left the business. Important information that should be recorded includes: exactly what was changed; when amendments took effect; what prior process was followed and how changes were communicated to staff.

In this technological age, it is relatively simple to track and record how policies are communicated via e-mail, to whom such e-mails were delivered and who actually read the e-mails. Some businesses append important communications to payslips when these are distributed to staff, allowing further confirmation of the communication of important issues or workplace changes. Whatever method is preferred, sound record keeping allows parties the ability to reconstruct events when the organisational memory has faded. A system that gathers the institutional memory leaves that fall as seasons change may prevent money from leaving the organisational coffers in years to come.

Wallace Albertyn is a senior Associate and Labour Law Practitioner at LabourMan Consultants.

Source: Bizcommunity