This article will discuss the governing legislation with regards to placing employees on paid leave, as well as address the rights of both employers and employees, particularly with regard to remuneration and holiday pay.  Finally, it will discuss whether employers and employees may negotiate paid leave so as to mitigate the financial impact of the lockdown on both businesses and employees as a suitable alternative to the Temporary Employer/Employee Relief Scheme (TERS).


Section 20(10) of the Basic Conditions of Employment Act (BCEA) regulates circumstances under which employees may take paid annual leave. Paid annual leave may be taken by agreement between the parties or, when in the absence of any agreement, at the discretion of the employer.


In addition to the provisions of the BCEA, one must consult the Contract of Employment or any Policies and Procedure documents as set out by the employer, regulating the employee’s entitlements to annual leave.



In terms of the latest amendments to the TERS process, provisions have been made for employers to claim annual leave benefits from the fund. Therefore, employers who have required employees to take all, or a portion, of their paid annual leave may claim this period from the fund. They may then set-off the amounts which were paid to employees for annual leave against the money received from the fund. There is a condition that employers credit the employees with the leave days which they have taken.


It is quite clear that there will be limited circumstances in which employers can require employees to take their annual leave during the lockdown period. This is something which the Department of Employment and Labour has been encouraging employers not to do.



The benefits which can be claimed from the TERS fund are limited to a maximum of 3 months, a period well beyond the current lockdown period. It is anticipated that after the lockdown period, many businesses will remain closed despite being permitted to commence activities. These employers may continue claiming benefits from the TERS fund and should continue to refrain from requiring employees to lake annual leave while they do so.


The Department has urged employers and employees to be proactive in dealing with the effects of COVID19 during and after the lockdown, and where possible to negotiate in the best interests of both parties insofar as possible.  This will require that parties address long-term solutions in a way that avoids being reliant on the fund while ensuring survival and stability of the business operations over the medium and long term.