What Are My Holiday Entitlements- Annual leave

Annual Leave

Annual leave is a leave type with full remuneration that is earned by the employee in relation to the length of their employment with their employer. It is also one of the most prominent leave types in Sri Lanka that allows the employee to choose when they can redeem their leaves, the other being casual leave. Find out more about casual leave from this article.  

It is a common misconception that you are entitled to 14 days of annual leave each year. You are not able to redeem any annual leave in the first calendar year of your employment. The annual leave that you have accrued for the second year depends on the date of joining in the first year. Leave reset for annual and casual leave happens in correlation to the calendar year which begins on the 1st of January. Let’s look at a few examples of annual leave entitlements for the first, second and third years of employment according to the above clauses.  

Example 1

Joined date is July 15th  2022,    

  • Annual leaves for 2022 (July 15th to Dec 31st ) = 0 days 
  • Annual leaves for 2023 (Jan 1st to Dec 31st ) = 10 days
  • Annual leaves for 2024 (Jan 1st to Dec 31st) = 14 days   

Since you worked from July 15th until the end of the year in 2022, you have earned 10 days of annual leave that you can use in the next year, 2023. From 2024 onwards, you can use the full 14 days of annual leave.  

Example 2

Joined date is February 15th 2022,  

  • Annual leaves for 2022 (Feb15th to Dec 31st ) = 0 days
  • Annual leaves for 2023 (Jan 1st to Dec 31st ) = 14 days  
  • Annual leaves for 2024 (Jan 1st to Dec 31st) = 14 days 

Since you worked from Feb 15th until the end of the year in 2022, you have earned the full 14 days of annual leave that you can use in the next year, 2023. From 2024 onwards, you can use the full 14 days of annual leave. 

What you earn as annual leave according to your time commitment in the calendar year is the redeemable annual leave entitlement for the next year. This is why HR professionals often say that “you have to earn your annual leave”. When you can redeem your annual leave entitlement it should result from a mutual agreement between your employer and yourself.  

As prescribed in section (1), out of the 14 annual leaves, at least 7 must be taken on consecutive days. However, it is unclear the extent to which this clause is followed in Sri Lankan companies now 

In conclusion, the Shop and Office Act in Sri Lanka provides employees with annual leave entitlements based on their length of service and the calendar year. This system ensures that employees earn their annual leave gradually and can redeem it in subsequent years. While the Act specifies requirements for the duration and timing of annual leave, the actual implementation may vary among companies. 

It’s important for both employees and employers to understand these entitlements and agree upon the terms for taking annual leave. Annual leave plays a significant role in promoting work-life balance and allowing employees to take necessary breaks to rejuvenate and maintain their well-being. 

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