• With recreational travel still restricted, South Africans have cancelled their leave. 
  • For companies, the accumulation of leave days pose a financial risk - and could cause operational problems when everyone wants to take leave at once.
  • According to a new survey, many SA companies have changed their holiday policies to adopt to the Covid-19 crisis.
  • For more articles, go to www.BusinessInsider.co.za.

With nowhere to go during the national lockdown, many South Africans have cancelled their leave for the winter holiday.

Now companies are getting worried about the build-up of leave days. When the employees eventually leave the company or are retrenched, these days have to be paid out in cash.

Accumulated leave is a liability and must be reflected on the company's balance sheet, warns Pamela Stein from the law firm Webber Wentzel.

It could also cause operational problems.

“The risk is that everyone wants to take time off once the crisis has eased and the economy is starting to recover. That could create a lot of disruption and bottlenecks, just when staff are needed the most,” says Melanie Trollip, director of talent and reward at the risk management and insurance company Willis Towers Watson South Africa.

Also: working without time off is not good for staff wellbeing and long-term productivity.

In response, a third of South African businesses have changed their staff holiday policy due to Covid-19, a survey by WIllis Towers Watson found.

What South African companies plan to do about the build-up of unused leave:

Urge employees to take leave

By law, employees must take their annual leave within 6 months after the leave cycle. This means that if your company's leave cycle started in March 2019, you have to use all your leave by September.

So the first option is to ensure that everyone has taken their statutory leave that has accrued in their leave cycle, says Stein. 

Allow leave to be carried over

More than half (52%) of the South African companies surveyed by Willis Towers Watson who have adapted their holiday leave policies amid Covid-19, have made changes to employees’ leave that can be carried forward.

“Managers should discuss this with their staff and decide the best way of coping with the holiday glut. The solution will vary from company to company, with many opting to let staff carry leave forward, or to be more generous in the amount that can be carried,”  says Trollop.

For example, a company could allow an accumulation of leave for up to a year from the end of the leave cycle (instead of six months), says Stein.

Enforce a stricter policy

Other SA businesses are being less flexible – they are setting dates when holidays must be taken or are running a ‘use it or lose it’ approach, says Trollop.

Buy back unused leave days from staff

Some businesses have offered to buy holiday days back from staff, but that may be difficult for many in the current economic climate, she adds.

 “It is really important that people take time off for their wellbeing and health, even if it does not involve a long holiday that involves travel. During the pandemic, we may need to rethink our approach to holidays a little. Staycations and more long weekends may be a way of using leave up.”

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