Not taken leave for seven years

Because of the nature and operational needs of the Company, one of our senior managers has not taken his annual leave for the past 7 years. However, he has taken emergency leave of 4 to 5 days and several short sick leaves. He has now lodged a claim for payment of salary in lieu of the accrued annual leaves he has not utilised. He has also indicated in his letter of claim that he will claim the payment for the remaining two years’ accrued annual leaves in the due course. We would like to know if the senior manager is entitled to be paid the accrued 7 years annual leave pay. In case the Company does not settle the claim now, will it be liable to pay the accrued leave claim at the time of retirement or the time of termination of the contract?
GG, Dar es Salaam

Section 31(5) of the Employment and Labour Relations Act [Cap.366 R.E 2019] disallows an employer to deduct sick leave or any other statutory leave days due to the employee from the number of days of annual leave. Only non-statutory paid leave days given to the employee at the discretion of the employer can be deducted from accrued annual leave days. An employee is entitled to all the statutory leaves due to him during a particular leave cycle even where the leaves are taken consecutively provided the leaves are due to the employee. If what you have called emergency leave taken by the senior manager was a leave taken in order to attend a sickness or funeral of a spouse, child grandparent, parent or a sibling, the days spent by the employee for attending such leave cannot be deducted from the annual leave due to the employee because compassionate leave is one of the statutory leaves allowed. If the emergency leave taken by manager had no bearing on sickness or funeral of the near relative, the number of days spent to attend such leave can be deducted from the annual leave days when calculating the amount of leave pay due to the employee.

In terms of section 31(6)(7)(8)(9) of the Act, the employer may, with permission of the employee, require the employee to work during the period of annual leave. However, where the employee works for the employer when the employee should have been on annual leave, the employer is required to pay the employee salary in lieu of annual leave to which the employee is entitled. This means that for the month the employee worked for the employer while he should have been on annual leave, he will be paid a double salary.

The salary in lieu of annual leave is one of the terminal dues the employee is entitled to be paid upon termination of his contract of employment or upon retirement. However, in order for the employee to be paid salary in lieu of accrued annual leave or claim it as terminal due at the time of termination of his employment or retirement, the employee must have applied for the accrued leave within 6 months after the end of accrued leave cycle or within 12 months after the last accrued leave cycle where the delay to apply for leave was attributed to the operational requirements of the employer. The senior manager was therefore supposed to lodge his claim for accrued annual leave pay in lieu of annual leave within 12 months from the date each annual leave was supposed to have ended. Besides, section 31(5) of the Act bars the employer from entering into any agreement with the employee to pay employee salary in lieu of annual leave for two annual leaves consecutively. Although your senior manager has not taken his annual leave for 7 years, legally he was not allowed to work for the Company for 7 years consecutively without taking his annual leave.

Assuming the employee applied for the accrued annual leave timely within the prescribed statutory period of limitation, the claim can still only be paid at the discretion of the employer because it is out of time. The manager cannot enforce the claim for 7 years accrued annual leave by Court process. Under rule 10(2) of the Labour Institutions (Mediation and Arbitration) Rules, 2007, a claim for accrued leave pay in lieu of annual leave should have been lodged within 60 days from the date when it was due.