The Essential Guide to Leave Management
Managing employee leave is more than just tracking time off—it’s a key part of keeping a business compliant, financially stable, and running smoothly. As a business accountant, you play a crucial role in helping your clients implement efficient leave management systems that align with South African labour laws.
This article will examine leave management practices and the key laws businesses must follow. We will also outline practical steps to create a structured leave system that benefits both employers and employees.
What is Leave Management?
Leave management is a business process that tracks, approves, and records employee leave while ensuring compliance with legal requirements. It includes different types of leave, such as:
Annual Leave (holiday breaks)
Sick Leave (for illness or medical recovery)
Maternity Leave (for pregnancy and childbirth)
Parental Leave (for new fathers, adoptive parents, and surrogacy)
Family Responsibility Leave (for family emergencies)
Why is Managing Leave Important for Businesses?
A well-structured leave management system provides various benefits, including the following:
Compliance with Labour Laws and regulations i.e. regarding employee leave. Failure to comply can lead to penalties, employee disputes, or even legal action.
Accurate payroll and financial records as leave balances can impact payroll, tax filings, and financial statements. Poor tracking can lead to incorrect salary payments and unexpected leave liabilities.
Improved workforce planning and productivity as unstructured leave can result in staff shortages, missed deadlines, and unhappy clients. A well working system ensures work continues smoothly.
Happier, healthier employees are taking planned leave, reducing burnout and improving productivity.
Automating leave management saves time, reduces paperwork, and prevents expensive payroll errors.
Applicable Regulations
Employers in South Africa must comply with several laws that govern leave entitlements. Here are the most important ones:
Basic Conditions of Employment Act (BCEA)
The BCEA sets out minimum leave entitlements for employees, including:
Annual leave: 21 consecutive days of paid leave per year or 1 day for every 17 days worked.
Sick leave: six weeks of paid sick leave in three years (based on the employee’s regular work schedule).
Family responsibility leave: 3 days of paid leave per year for immediate family emergencies.
Maternity leave: 4 consecutive months of unpaid maternity leave.
The LRA protects employees from unfair dismissal or discrimination when taking leave. It ensures that leave policies are applied fairly and consistently.
This law prevents discrimination based on gender, pregnancy, race, or disability in leave approvals. Businesses must ensure that maternity and parental leave policies apply equally to all eligible employees.
Employers must contribute to the Unemployment Insurance Fund (UIF) to ensure employees can claim benefits when on maternity, adoption, or sick leave.
Parental Leave Regulations (Labour Laws Amendment Act)
10 consecutive days of parental leave (for fathers or partners)
10 weeks of adoption leave (for a single adoptive parent).
10 weeks of commissioning parental leave (for surrogacy arrangements).
Steps to Implement a Leave Management System
Step 1: Define a Leave Strategy
Work with business owners and HR teams to set clear leave policies. Ensure policies align with labour laws and company goals.
Step 2: Know the Legal Requirements
Regularly update policies to stay compliant with regulations.
Consult with legal and HR experts when making policy changes.
Step 3: Develop and Communicate Leave Policies
Provide a clear outline/summary of:
Types of leave available for employees which can be presented in a table as shown below.
How leave is accrued and deducted.
For example, an employee earns 1.75 days of leave per month worked (21 days ÷ 12 months). After 6 months the employee will have 10.5 days of leave available. If an employee takes 5 days of annual leave, their available balance reduces to 5.5 days accordingly. If an employee exceeds their leave balance, the extra leave is treated as unpaid leave, and deductions are made from their salary.
Step 4: Implement a Leave Management System
Consider automated leave software to track leave accurately. Look for features such as:
Real-time leave balance tracking.
Payroll system integration.
Self-service access for employees.
An example of a leave request process is:
Employee submits Leave Request Form at least 2 weeks in advance for planned leave. Emergency leave (e.g., sick leave or family responsibility leave) must be reported on the same day via phone, email, or an HR system.
Manager approves or declines the request after considering the team schedules and deliverables.
HR updates leave records, leave balances and ensures payroll deductions (if any) are applied correctly.
Once the approved leave is recorded in the system the employee receives confirmation.
Employee takes leave. Once leave is completed, employees resume work and update their status.
Step 5: Train Employees and Monitor the System
Train managers and employees on how to use the system.
Regularly review leave trends and update policies as needed.
Tips and Best Practices
Keep up to date with labour law changes and adjust your business policies and practices.
Encourage employees to take leave – Ensure they use their leave to avoid burnout.
Be fair & consistent, prevent disputes, apply leave policies equally to all employees.
Schedule leave in advance and avoid understaffing.
Improve leave policies over time through regular reviews and updates based on employee feedback.
Stay ahead of legislative changes with CIBA’s Monthly Legislative Updates available on Channel 1. Register now for the first update on 20 February 2025!
Webinar Date: 20 February 2025
Time: 14:00 - 15:00
What You’ll Learn
This webinar is designed for accountants who want to stay ahead of industry changes, provide better services to clients, and ensure full compliance.
Understand the latest legislative updates and how they impact your business, practice, and clients.
Stay compliant by keeping up with changing requirements and deadlines.
Expand your service offerings by adapting to new legal requirements.
Learn where to find the right guides and documents to support your work.
Exclusive access to expert insights – connect with the presenter and CIBA’s technical unit for follow-up Q&A via email.
