Author: Prianka Naidoo
Editor’s note: do you want a tool so your managers can ask specific questions about your own policies and the relevant South African legislation, call us today for a demo of our HRTorQue HR Support app. It can also be designed to help with responding to questions on your specific bargaining councils, unions, medicals aids, you name it.
One of the questions that arise in the workplace involves annual leave and the calculation of it. Employees may wonder whether there is a relationship between overtime hours and annual leave calculation. It would seem quite logical to assume that the more hours worked during overtime periods, the higher the number of annual leave days. However, this is incorrect.
Annual leave calculations are normally done by using ordinary working hours for an employee rather than his or her overtime work periods. Compensation for overtime is different, and this type of work does not have any effect on annual leave calculations.
The point of having annual leave days is to give employees a break from their regular job. Thus, calculations are made based on an employee’s regular working hours. Since overtime affects an employee’s income rather than his or her working schedule, it does not impact annual leave days.
Many misconceptions arise since employees see their overtime hours recorded in large numbers in their payslips and automatically assume that such an occurrence must be compensated by leave days. It is for this reason that employers need to clearly explain how:
- Ordinary hours are determined
- Overtime hours are determined
- Annual leave is earned
For example, if an employee works 45 ordinary hours and 15 overtime hours, while they might have worked a total of 60 hours in the week, the earning of annual leave is based only on the number of ordinary hours of work, which totals 45 hours.
If employees usually work on Sundays or Public Holidays as part of their ordinary duties, such days of work earn extra compensation, depending on the terms and conditions of employment and labour laws. If Sunday constitutes an ordinary working day, the employee receives 1.5 times the regular pay, except if otherwise agreed. Likewise, if work is done on a Public Holiday, the worker earns extra pay, normally twice the regular pay according to BCEA.
So, although employees may be paid at a higher rate for working on Sundays or Public Holidays, this does not imply that there will be any increase or doubling of their annual leave entitlements. Employees’ annual leave will still be calculated according to the number of hours or days that constitute their ordinary working period.
For any leave-related query, chat to one of our HR consultants today. Email us on [email protected].