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Workers want leave exchanged for cash

BY: Mirror Lawyer

WORKERS in our company have threatened a lockout and sit-down strike if management failed to heed their plea for their next two years’ annual leave to be exchanged for cash to enable them to make up for some losses brought about by the lockdown during the pandemic. 

According to them, they had enough rest during the lockdown and what they needed most now was money to make up for the reduction in salary during the months they did not work. Management has refused to yield to the request, thus, creating a tense atmosphere at the workplace. What is your advice?

Kenneth Wilson, Tema


Dear Kenneth, under the previous Labour laws of the country, employees and management were free to negotiate the terms on an annual leave. This negotiation may include mutual agreement for workers to work all year round, forgo an annual leave and receive monetary compensation instead of the leave.

We are aware that under that arrangement, many workers benefited financially. Annual leave is a right provided from time immemorial for all classes of workers around the globe to take some time off within the year to reflect over activities of the past year.

Workers could also attend to some personal matters which they may never have time in the course of the year to deal with and generally to take a break from the busy routine which causes stress related to their work schedules. It is also a time provided for workers to make more time for their families, travel and visit loved ones within and outside their countries of jurisdiction and also make time for recreation.

The concept of the annual leave has many benefits for the employer and employee. For the employer, opportunity is given to train others within the establishment to be able to step into the shoes of the worker on leave and to manage and perform the schedule of that worker. This is necessary so that in case of any emergency such as illness, the company would not be left stranded because of the absence of one employee. For workers, an annual leave provides health benefits, improves performance and leads to higher productivity.

I believe it is for these and many other reasons that the new Labour Law reviewed the concept of the annual leave. Section 20(1) of the Labour Act, 2003, Act 651 provides that every worker is entitled to a minimum of fifteen working days’ leave with full pay annually. Section 31 of the same Act provides that any agreement to relinquish or forgo the entitlement of an annual leave is void.

In effect, the Labour Act makes annual leave compulsory and no worker can be deprived of this right or negotiate with management to sell his or her annual leave for cash. The only negotiation permitted by law on an annual leave within the year is the manner such leave shall be taken.

An employer can ask the employee to take his/her leave in two installments, but this must be clearly set down in writing, informing the employee of the specific dates of the leave within the same year. The Labour Act came into force on March 31, 2004.
From that date any negotiations or provision in a collective agreement that permits management and workers to sell annual leave for cash would be contrary to law and therefore void.

Your company management was therefore right in declining to accept the request of the workers to negotiate their annual leave for cash. The workers’ threat to embark on a sit-down strike on this ground will be contrary to law and expose all of you to possible disciplinary action.