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Labour Relations Act, 1995 (Act No. 66 of 1995)

Notices

Bargaining Council for the Metal and Engineering Industries

Extension of the Consolidated Main Collective Agreement to Non-parties (for the period 1 July 2021 to 30 June 2024)

Part I

14. Leave Enhancement Pay (L.E.P.) (formerly known as Leave Bonus)

 

For the purposes of this section—

 

‘Leave Qualification’

shall have the meaning ascribed to it in Sections 12(3)(a) and 16(5)(a) respectively in Part I of this Agreement;

 

‘Annual Shutdown’

means a Company level arrangement in terms of which all employees proceed on leave at the same point in time;

 

‘Staggered Leave’

means a Company level arrangement in terms of which leave qualification is determined by date of employment of every individual employee;

 

‘L.E.P.’

means Leave Enhancement Pay;

 

(1)

(a) Every employee shall be entitled under this Agreement to L.E.P. calculated at 8.33% of the actual hourly rate applicable on the date on which the employee proceeds on leave, which shall be calculated according to the following formulae:

 

Employees working a five-day week:

Actual ordinary weekly wage x 52 weeks x 8.33% x number of shifts worked divided by 234; (excluding allowances)

 

Employees working a six-day week:

Actual ordinary weekly wage x 52 weeks x 8.33% x number of shifts worked divided by 283; (excluding allowances)

 

Note: For purposes of calculating leave enhancement pay, periods of absence provided for in subclauses 12(3)(a) must be taken into account.

 

(b) The leave enhancement pay of an employee who terminates his service or whose employment is terminated by the employer shall be calculated at 8.33% of his actual hourly rate at the date of termination of such employment and shall be calculated according to the following formulae:

 

Five-day week actual ordinary weekly wage rate x 52 weeks x 8.33% x number of shifts worked divided by 234 (excluding allowances).

 

Six-day week actual ordinary weekly wage rate x 52 weeks x 8.33% x number of shifts worked divided by 283 (excluding allowances).

 

(c) Where employees and employers agree to the electronic transfer of their wages into a bank account on a monthly basis, then the provisions of the Agreement requiring the working of a stipulated number of qualifying shifts as set out in subclause (a) and (b) above, for purposes of leave pay and leave enhancement pay, will not apply to these employees.

 

Important Notes.

(a) For purposes of the above calculations the figures “234” and “283” constitute the maximum number of shifts any employee can work in order to qualify for leave and is dependant on whether a five or six day working week is in operation;
(b) For purposes of calculating L.E.P. the term “Actual Ordinary Weekly Wage” excludes any allowances payable to employees.

 

(2) Whenever an employee to whom this subclause applies qualifies for and takes his paid leave after the date of coming into operation of this Agreement, he shall at the same time be paid leave enhancement pay pro rata from the date of engagement in the case of an employee qualifying for his first period of paid leave in the service of an employer.

 

(3) Whenever the employment of an employee terminates before he becomes entitled to paid leave, the employee shall be paid leave enhancement pay, proportionate to the number of shifts credited to him for leave purposes or, at his request, he shall be credited with a share of the leave enhancement pay calculated in the same manner.

 

(4) No leave enhancement pay shall be credited for periods of employment which in terms of clause 12(3)(a)(i) and (ii) of this Part of the Agreement do not count towards the paid leave.

 

(5) Every employer in the industry is required to make an adequate monthly financial provision for the payment of employees leave enhancement pay. The parties to this Agreement regard full compliance with this provision as being of particular importance.

 

(6) An employer may enter into an arrangement with the Bargaining Council to transfer the employees’ monthly leave enhancement pay entitlement to the Bargaining Council for collection, safekeeping and distribution to the affected employees when due, in terms of this section.

 

(7)        Monthly Contribution Scheme.

(a) As from 1 January 2003 employers in the industry shall, on a voluntary basis, be entitled to submit to the Council a monthly contribution towards the annual L.E.P. entitlements of their employees;
(b) Whilst the provisions of this Clause provide for contributions in respect of the annual L.E.P. entitlements of employees, nothing herein contained shall preclude employers from making similar monthly contributions towards the employees annual leave pay entitlement.
(c) The Council’s monthly L.E.P. collection scheme, as referred to in (a) above, shall be available in respect of all scheduled and unscheduled employees for whom the employer makes such monthly L.E.P. contributions.  All employees for whom contributions are paid over to the Council must be identified by name, I.D. number and the bank account number of the employee;
(d) For purposes of subclauses (b) and (c) hereof the Council shall establish a L.E.P. fund into which all contributions received from employers will be deposited.  Whilst participation in the Council’s monthly contribution scheme will be the employers' discretion, continued participation shall be compulsory once contributions commence in respect of the particular year in which contributions are made;
(e) The employer may elect to discontinue participation in the Council’s monthly contribution scheme in a specific year only after all employees on whose behalf the employer had paid over L.E.P. contributions qualified for and received their annual L.E.P. entitlements.
(f) Any interest earned in the L.E.P. fund account resultant from the monthly contributions shall accrue to the Council and will be transferred to the Council’s general account for its disposal.
(g) Should any firm contributing on a monthly basis to the Council L.E.P. scheme be placed under provisional Liquidation the Council shall, provided it is made aware thereof, inform the liquidator of the monies standing to the L.E.P. credits of all affected employees;
(h) Due to administrative costs the Council will not pursue the failure by an employer to make the monthly contributions;
(i) The Council shall, when so requested by the employer at the time of qualification for L.E.P.,  pay over to the employer or into the individual employees’ bank accounts the contributions paid over by the employer to the Council as L.E.P. monies.  The Council shall not accept responsibility for any shortfall in employee L.E.P. entitlements at qualification dates and its responsibility will be for payment of contributions made.
(j) Complaints lodged by employees alleging short payment of L.E.P. monies shall be treated as a contravention of a Collective Agreement of the Council.  Should the Council investigation identify deliberate underpayments, the Council reserves the right to charge the employer a fee for services rendered.
(k) The date/s on which such L.E.P. monies become payable by the Council shall be determined by the employer subject to a 30-day notice period.  Where employment terminates prior to employee’s qualification for paid leave and L.E.P., the employer shall be required to make such pro-rata payments and reclaim such monies from the Council.
(l) The manner in which the Council shall transfer the employees’ entitlements shall either be by direct transfer into the employers or employees’ bank account or alternatively, by a bank guaranteed cheque.  For purposes hereof the Council shall be guided by the employers request.
(m) The Council shall deem employers who do not wish to participate in the Council’s L.E.P. monthly contribution scheme as financially capable of meeting their obligations in this regard.

 

(8) Exemptions:

(i)        Exemptions from leave enhancement will only be granted under exceptional circumstances;

(ii) The exemption application must be supported by appropriate financial statements showing sufficient financial hardship to warrant the exemption sought;
(iii) If granted, the employer should then be obliged to become a compulsory contributor to the monthly contribution scheme as set out in sub clause (7) above.
(iv) Exemption applications, from establishments observing annual shutdown arrangements, must be submitted to the Bargaining Council on or before 31 October.