Can employers prevent employees from carrying over annual leave?

Considering the rise in traffic these days, it is safe to say that most people are already in vacation mode, as the end of the year is rapidly coming. However, many of us have worked remotely from home since the pandemic started. Since we had nowhere to go during the MCO, many employees would have accumulated a substantial amount of annual leave. You may have questioned at some point whether you can carry over all of your unused annual leave to the following year when you will hopefully be able to use it. And if you wanted to carry forward your unused annual leave, could your employer prevent you from doing so?

 

Depending on your company policy

Ultimately, it depends mostly on what your employer states, i.e., what your employment contract specifies. For instance, your employer may stipulate that you receive 18 days of annual leave per year, 7 of which can be carried over to the following year and 7 of which must be used within the first half of the following year. If this is stated in your contract and you sign it, you consent to this yearly leave policy and cannot expect them to carry forward additional days unless they let it.

Nevertheless, your employment contract may stipulate that any unused leave can be cashed out. If your employer only provides you with this option and not the other, you will be required to choose it. If both choices are listed in your contract, your company may have the option to use either one. The situation is different if your contract specifies both alternatives, but you are compelled to forfeit all of your leave. In this case, your company should be reported to the Ministry of Human Resources.

 

Know your rights

Regardless of company policies, annual leave is a legal requirement. According to section 60F of the Employment Act of 1955:

• 8 days of annual leave if you’ve worked with the company for under 2 years
• 12 days of annual leave if you’ve worked with the company for more than 2 years but less than 5 years
• 16 days of annual leave if you’ve worked with the company for 5 years or more

However, it is vital to note that the Employment Act only applies to people who earn less than RM2,000 and reside in Peninsula Malaysia and the Federation of Labuan. Therefore, if you fall outside the scope of this Act, the number of days of leave you receive will be determined by your employer. However, it is generally safe to state that it takes around the days shown above. In either case, the yearly leave of employees should be included in all employment contracts.

 

Employers who fail to provide sufficient annual leave will be fined

According to Section 100 of the Employment Act:

(4) Any employer who fails to grant...his employees' annual leave...commits an offence, and shall...be ordered by the court...to pay to the employee concerned the ordinary rate of pay in respect of every day of such leave not so granted, the payment so ordered being in addition to the wages payable to the employee for the work done on any such day, and the amount so ordered by the court to be paid shall be recoverable as if it were a fine imposed by such court.

(5) Any employer who fails to grant sick leave, or fails to pay sick leave pay, to...his employees...commits an offence, and shall…be ordered by the court...to pay to the employee concerned the sick leave pay for every day of such sick leave...and the amount so ordered by the court to be paid shall be recoverable as if it were a fine imposed by such court.

 

Keynote

If your employer denies you your annual leave to which you are entitled, the court will order them to compensate you for each day of leave that you were entitled to but did not receive. This applies to both annual and sick leave.

Therefore, if your contract already permits it, your employer cannot prevent you from carrying over your leave. If the contract also included other options, such as cashing out extra leave, your employer may opt for those alternatives rather than granting you significantly more leave the following year.

 

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