Dear PMSL:
If company policy states that a limited number of days vacation leave can be carried over into a new calendar year, is the employer allowed to take away vacation leave in excess of this limit not taken by the employee? If so, must there be compensation for leave thus taken away?

PMSL's Response:
Yes, vacation leave should be compensated for as it is a property right and can only be removed by due process of the law or by the agreement of the parties.

For example many companies do have policies on the accumulation and carry forward of leave and operate on a “use it or lose it” basis.  The onus is on the employee to apply for his leave.

Where, on the other hand, the employer denies the employee’s leave request, the leave should be rescheduled or some arrangement made for compensation where the leave application is not to be approved.

Companies should however encourage employees to take their vacation leave as this promotes the well-being of the employee and benefits the employer by providing opportunities to develop successors.  It is also provides a “check” in the system to ensure that policies and procedures are being maintained.