Services / Labour and employment
Untaken annual leave: does it get paid out?
The question comes up more than almost any other: does untaken annual leave get paid out? The answer is not simply yes or no, because the statute puts leave for the year of departure and accumulated leave in separate paragraphs, and the two diverge where the dismissal is for misconduct.
Where the entitlement starts
Section 30 of the Labour Protection Act B.E. 2541 (1998) gives an employee who has worked continuously for one full year annual leave of not less than six working days a year, the days to be fixed by the employer in advance or as agreed. In later years the employer may give more than six. Employer and employee may also agree in advance to accumulate leave untaken in a year and carry it into following years.
First paragraph: leave for the year of departure
The first paragraph of section 67 provides that where the employer terminates otherwise than under section 119, the employer must pay wages for annual leave in the year of termination, pro rata to the entitlement under section 30. Note what the paragraph covers: termination only, and it excludes termination under section 119, the provision under which no severance is due.
Second paragraph: accumulated leave
The second paragraph is drawn far wider: where the employee terminates the contract or the employer terminates, whether or not the termination falls under section 119, the employer must pay wages for accumulated annual leave the employee is entitled to under section 30. The phrase whether or not it falls under section 119 is the one most often read past, and it is what separates accumulated leave from leave for the year of departure.
The two paragraphs read together
Read together the picture is clear. Resign, and accumulated leave is payable. An ordinary dismissal pays both the accumulated leave and the pro rata leave for the year of termination. A dismissal under section 119 still pays the accumulated leave, even though no severance is due and the current year's leave is not. The common belief that dismissal for misconduct leaves nothing at all does not match the words of the second paragraph.
When it must be paid, and what accrues
The final paragraph of section 70 requires that on termination the employer pay the wages and the sums payable under the Act which the employee is entitled to within three days of the termination. Section 9 adds interest at fifteen per cent a year during default, and where the employer intentionally withholds payment without reasonable cause, a further fifteen per cent of the outstanding amount for every seven days once seven days have passed from the due date.
PREPARE
What to bring
- The contract and the work rules on leave
- Leave records for every year of service
- Any written agreement on accumulating leave
- The termination letter and the reason it gives
- Recent payslips, to work out the daily rate
QUESTIONS
Questions this raises
My employer says leave not taken is forfeited.
Section 67 does not condition payment on the employee having asked to take the leave, and section 30 places the duty to fix the days in advance on the employer. A work rule stating that untaken leave is forfeited therefore has to be measured against the section 67 right. The question turns on the wording of the rule and on the facts about who was fixing the days.
I resigned before completing a year.
Section 30 gives the entitlement on completion of one continuous year. For an employee short of a year, its second paragraph says the employer may grant annual leave calculated pro rata, wording that gives the employer an option rather than imposing a duty. What matters is therefore whether the contract or the work rules grant the right themselves.
LAW
The legislation
- Labour Protection Act B.E. 2541 (1998), section 30
- Labour Protection Act B.E. 2541 (1998), section 67
- Labour Protection Act B.E. 2541 (1998), section 70
- Labour Protection Act B.E. 2541 (1998), section 9
ENQUIRIES
