Can your employer deduct pay for unpaid leave?

Your sick leave has run out, or a relative's funeral is three provinces away. You ask for a few days off, your employer agrees, and at month end your salary is short. Is that allowed? Usually, yes. But there is a line between not paying for time off and taking money out of your pay, and employers cross it more often than they realise.

This guide is part of our Leave in South Africa: every type of leave and your rights, which links every guide on the topic.

This guide explains how unpaid leave works, how the amount should be worked out, when a short payment becomes an unlawful deduction, what happens if you stay away without permission, and how to dispute a payslip that is wrong.

Unpaid leave is a matter of agreement

The Basic Conditions of Employment Act 75 of 1997 (the BCEA) gives you paid annual leave, paid sick leave and paid family responsibility leave, and parental leave that is usually unpaid by the employer but supported by UIF benefits. It does not give you a general right to unpaid leave, and it does not oblige an employer to grant it.

Unpaid leave is therefore an agreement: you will not work for a set period, and the employer will not pay you for it. Your contract or a leave policy may set the rules, such as who approves it and how much notice you must give. Where there is no policy, it is simply a request that the employer may grant or refuse.

Refusal is not the end of the matter if the employer is inconsistent. Granting unpaid leave freely to some staff and refusing it to others in the same position, without a good reason, can be challenged as an unfair labour practice relating to benefits, and refusing it on a ground such as religion or family status can be unfair discrimination. The guide to unfair labour practices explains that route. Most disputes about unpaid leave are really disputes about what was agreed, so get it in writing.

No work, no pay

The employment relationship is an exchange of work for pay. Where you do not work, by agreement, the employer is not obliged to pay you for that time. The same idea appears in the Labour Relations Act: section 67(3) says an employer need not pay an employee for services not rendered during a protected strike or lock-out.

The principle cuts both ways. It allows the employer to hold back pay for the days you were off, and only for those days. It is not a licence to recover anything else, and it does not apply to days you were entitled to take as paid leave. If you had sick leave or family responsibility leave available and qualified for it, the day is paid, whatever the employer calls it.

How the amount should be worked out

The BCEA gives a method. Section 35 says a wage is calculated by reference to the hours ordinarily worked, and that a monthly wage is four and one-third times the weekly wage. For someone who works a five-day week, that makes a month about 21.67 working days, so a day's pay is the monthly salary divided by 21.67. Multiplying the monthly salary by 12 and dividing by 260 working days gives the same answer. On a six-day week, divide the annual salary by 312.

The commonest error is dividing by 20, on the theory that a month has four weeks of five days. That overstates the daily rate by about eight per cent, so every unpaid day takes too much.

Watch the effect on other entitlements too. If you accrue annual leave at one day for every 17 days worked or paid, days of unpaid leave are neither, so they do not earn leave. If unpaid leave runs for weeks, ask what happens to your medical aid and retirement fund contributions. The fund or scheme rules usually decide this, and if the employer keeps paying your share and later wants it back, that recovery needs your written agreement.

Turning unpaid days into paid ones

Section 20(6) of the BCEA contains a useful rule. If you ask in writing, your employer must let you take annual leave during a period of unpaid leave. So if you have annual leave owing and your employer has put you on unpaid leave, or agreed to it, you can ask in writing for those days to be treated as annual leave and paid.

This matters most when an employer imposes "unpaid leave" during a quiet period while you still have leave in the bank. The guide to how much annual leave you get explains how to work out your balance.

When it becomes a deduction

Section 34(1) of the BCEA says an employer may not make any deduction from your remuneration unless you have agreed in writing to the deduction in respect of a specified debt, or the deduction is required or permitted by a law, collective agreement, court order or arbitration award.

Not paying you for days you did not work is generally treated as no work, no pay rather than a deduction. But the following are deductions, and are unlawful without that consent or legal basis:

• a fixed penalty or "admin fee" for taking unpaid leave, or for short notice;
• docking more than the time actually lost, such as a full day for leaving two hours early;
• an inflated daily rate that takes more than the days were worth;
• recovering an overpayment from a later payslip.

The last one is common. Payroll often runs before the leave is captured, so you receive a full month's pay and the employer claws back the unpaid days the following month. Section 34(5)(a) allows an employer to require you to repay an overpayment that resulted from an error in calculating your pay. Whether it may simply take that money from your salary without your agreement is less clear. In Ubogu, decided in December 2017, the Constitutional Court struck down a provision of the Public Service Act that let state employers recover overpayments from salaries without due process, describing it as self-help. The safe course for both sides is a short written agreement recording the amount and how it will be repaid.

The full rules on deductions, including the four conditions for deductions for loss or damage, are in the guide to what can be deducted from your salary.

Can your employer put you on unpaid leave?

Not on its own say-so. If you are ready and willing to work and the employer sends you home without pay, that is not unpaid leave in law. The general rule is that you remain entitled to your pay unless your contract or a collective agreement allows it, you agree to it, or there is a lawful lock-out.

Employers facing a slow period sometimes propose short time or unpaid leave as an alternative to retrenchment. That can be sensible, and it can save jobs, but it has to be agreed or properly consulted on. If it is part of a retrenchment process, the guide to your rights during retrenchment consultation applies.

Leave taken without permission

If you stay away without permission, or after a request for leave was refused, the employer may hold back pay for the days you were absent. That is still no work, no pay. It may also treat the absence as misconduct and take disciplinary action, usually starting with a warning for a first short absence. A long unexplained absence may be treated as desertion.

What it may not do is fine you on top. A rule that an unauthorised absence costs two days' pay for each day missed is a deduction and needs a lawful basis under section 34, which a workplace rule alone does not provide. The guide to dismissal for absenteeism explains the discipline side.

If the leave you took was leave you were entitled to, such as family responsibility leave for a sick child, the employer's refusal does not make it unauthorised. The guide to family responsibility leave sets out who qualifies.

Disputing a short payment

Section 33 of the BCEA requires your employer to give you, on each payday, written details of your pay, including the amount and purpose of every deduction. Start with your payslip and check how the shortfall was calculated.

Then raise it in writing with HR or payroll, setting out the dates, the correct daily rate and the amount owed. If that fails, use the grievance procedure. Beyond that you can complain to a labour inspector at the Department of Employment and Labour, who can issue a compliance order, or, if you earn below the BCEA earnings threshold, refer a claim for the unpaid amount to the CCMA under section 73A. Higher earners use the courts. The guide to what to do when your employer does not pay you explains each route, and the salary deduction checker tests a specific deduction.

Worked example

This example is illustrative. Lerato is an administrator at a retailer in Polokwane, earning R15 600 a month on a five-day week. Her aunt dies in the Eastern Cape. An aunt is not on the family responsibility leave list, so she asks for four days of unpaid leave, and her manager agrees by email.

Using section 35, her daily rate is R15 600 multiplied by 12 and divided by 260, which is R720. Four days come to R2 880. Payroll instead divides by 20, giving R780 a day and a reduction of R3 120, and adds a R500 "short notice penalty" under a company rule. Lerato's payslip is R3 620 short.

R2 880 is a lawful no work, no pay reduction. The extra R240 and the R500 penalty are deductions with no written consent and no legal basis, so they are unlawful under section 34. She writes to payroll with the calculation and is refunded R740 the next month.

Change the facts: Lerato has six days of annual leave owing. Had she asked in writing under section 20(6), her employer would have had to let her take four of those days during the unpaid period, and she would have lost nothing. Change them again: had she simply not come in for four days, the R2 880 would still be held back and she could face a warning, but the penalty would still be unlawful.

What to do

1. Before taking unpaid leave, get the dates and the fact that it is unpaid confirmed in writing.
2. Check whether you have annual, sick or family responsibility leave available, and if you have annual leave, consider asking in writing to use it under section 20(6).
3. When the payslip arrives, work out the daily rate yourself: monthly salary times 12, divided by 260 for a five-day week.
4. Do not sign a blanket deduction form; agree in writing only to a specific, correct amount.
5. Query any penalty, fee or overcharge in writing, keeping a copy.
6. If it is not fixed, use the grievance procedure, then a labour inspector or the CCMA.