The practical application issues of vacation leave entitlement have been addressed

At a glance

• The Finance (Miscellaneous Provisions) Bill 2024, enacted on 26 July 2024, addresses practical application issues of the vacation leave entitlement provided under the Workers' Rights Act 2019 (Act).
• Employers can deny leave based on ‘reasonable business grounds’, now defined under the Act as ‘an inability or impracticability to reorganise working arrangement of existing workers or a detrimental effect on the ability to meet customers’ demand’ and, failing an agreement with workers on another period for the leave to be taken, must compensate workers with a normal day’s wage if leave cannot be granted.
• As part of the recent amendments to the vacation leave provisions under the Act, the leave must be taken for a minimum of six consecutive days and workers are required to give not less than three months’ notice (except in special circumstances).

The Act introduced a significant change by providing vacation leave entitlements for workers, not covered by the existing remuneration regulations and who earn up to MUR600,000 annually and who have been in continuous employment with the same employer for at least five years.

Under this Act, vacation leave accrues at a rate of 30 days for every five years of employment. The Finance (Miscellaneous Provisions) Act 2024, addresses several practical issues related to the implementation of vacation leave entitlements under the Act. According to the new provisions, vacation leave must be taken for a minimum of six consecutive days and workers are required to give three months’ notice when applying for the vacation leave. Employers can deny leave based on reasonable business grounds, such as the inability to reorganise work or meet customer demand. If leave cannot be granted and the employer and the employee cannot agree on another period for the leave to be taken, employers must compensate workers with a normal day’s wage for each day of leave applied for.

One unresolved issue is whether vacation leave should be treated as an acquired right or a status-related benefit. Clarification is needed on whether the vacation leave is retained regardless of salary changes or only available if the worker meets the eligibility criteria at the time of taking leave.

Employers should consider adopting vacation leave entitlements for employees earning above MUR50,000 as an incentive for long-term employment.