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In lieu of payment on 1st year annual leave still with company

KEA  
Guest
Fri, 09 May 2008 11:52:32 PM  (Last updated: Mon, 12 May 2008 08:27:30 AM)

Dear Mr Siew,

During the past 30 years, the new staff who joined the company is not entitled to take their first year leave , the 1st year annual leave only pay upon if the staff is leaving the company.

Now,after the 30 years , the company has changed the policy that all annual leavel shall be cleared within certain timeframe given. In line with the changes, management would like to settle the issue by in lieu of payment to all affected employees ( old staff, some joined in 1978) for their 1st year leave that are still with the company. Kindly advice this payment shall be based on the commencing salary or last drawn salary .

Thank you

KL Siew
Administrator
Sat, 10 May 2008 08:34:00 AM

I am trying very hard to recollect whether there was any provision in the Employment Act pertaining to annual leave 30 years ago. I think there was no such law yet at that time. Anyway, it does not matter. Since your company did not allow employees to take leave in the first year, then the leave earned in the first year would have been carried forward to the second year. When the staff took leave in the second year, they must be taking leave that was brought forward, By the same token, leave not exhausted in the second year would have taken in the third year and so on and so forth. To me, I would just total up of the leave earned during the entire period of employment minus the total number of leave taken all these years, the balance would then be either paid for or the staff are allowed to clear them within a certain time frame. So, the last balance of leave should be paid based on present salary. Have I read you correctly?

KEA
Guest
Sun, 11 May 2008 11:13:07 PM

Dear Mr Siew,

Thank you very much for your response.

But the management thinks that the 1st year annual leave is treated as reserve leave. Now, the question is, the payment should be based on the commencing salary or last drawn salary before implementation of the new policy?

eg: (a) Mr.A staff joined in 1988 with starting salary of RM 800/= , now,his salary has moved up to RM8,000/= , if the payment is based on the commencing salary, he will get 15/26days * 800 = RM461.54 .

(b) This Mr A's subordinate joined in 2005 with starting salary of RM 2600, he will get 15/26*2600 = RM1,500.00.

Because of this, I need to get some professional advice so that I can justify to the management that this payment should not be implemented.

Best Regards,

KEA

KL Siew
Administrator
Mon, 12 May 2008 08:04:00 AM

So it was reserved for 30 years. If I were the employee, I would want to the company to pay me compound interest for 30 years. Had the company paid me 30 years ago and I put the money in the saving for 30 years at compound interest, there would be a lot of money now. I am joking, if your company thinks that way, so be it. Seriously, ff the employee is not happy about it, consult the Labour Department or IR department for official advice.

KEA
Guest
Mon, 12 May 2008 08:27:30 AM

Dear Mr Siew,

Great! Thank you

KEA

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