Is My Annual Leave – My Entitlement?

Is My Annual Leave – My Entitlement?


Imagine this …

So, you’ve been planning for your overseas holidays ever since you saw Airasia’s promotions 4 months ago. You’ve bought the plane ticket in advance to take advantage of the offer. You’ve even booked the hotel and arranged the travel itinerary and you’ve been counting down every seconds of the day to your travel day. You have been looking forward to it ever since day 1. So what is next? You apply for your annual leave of course. And so, you do the needful and apply for your leave with your Head of Department. However, at that point of applying, your HOD told you, “Sorry, we can’t afford to release you for your leave as we’ve just received a new project and we need all the manpower we can to complete this project in time”.

At this point of time, you probably did not expect this reply coming from your HOD. You must be thinking, “Hey, this is not right! I have been planning this holiday of mine couple of months ago. This is my rights. This is my entitlement as the staff of this company…”

Alright, before you go on with your rantings, let us pause and come back to this topic, is the Annual Leave, an employee entitlement? Well, from our quick survey, many of you said “YES” that the annual leave is indeed an employee’s entitlement and we can see why. Many employees have the preconceived assumption that since the annual leave entitlement is in black and white, penned down in their employment contracts, they are at liberty to go on with their leave, regardless for any reason and that their employer has no right to decline their leave applications or ‘burn’ their un-utilised leave.

Unfortunately, their beliefs are only half true. To be fair, while the law does not require employees to provide reasons for going on annual leave, the very same law also does not state that annual leave is an entitlement that can be exercised solely at the employee’s discretion.

So, is annual leave an entitlement? a right? or a privilege?

In the case of Azizah binti Aziz v Overseas Assurance Corporation (Malaysia) Berhad (Award 1413 of 2006), The Industrial Court quoted BR Ghaiye in “Misconduct in Employment” which explains the concept of annual leave:

“The expression ‘leave’ means leave of absence, that is to say, the permission obtained by an employee from his employer relieving him from the duty of attending work… when an employee requires leave, it is necessary to apply for leave even if he has some just cause for absence… no employee can claim as a matter of right leave of absence without permission …”

In this case, the Industrial Court held that an employee who takes leave as they wish and please, may “as a matter of right give the company no choice but to dismiss them”. The court went on to say that taking leave without approval is a misconduct so serious that the company was entitled to dismiss the employee even though she had been with the company for 20 years.

While employees may be entitled under their employment contract to a number of annual leave per year, the absolute final say falls on their employers for the approval. Employers have the rights to reject or approve leave applications at their discretion. Some example of reasons for rejecting annual leave applications could include:

  • Notice of leave given was insufficient;
  • Non-compliance to the company’s policies or procedures in regards to the leave application;
  • Your other colleagues are already going on leave at that particular time; or
  • The business needs of the company require the employee to be at work (eg: peak period; urgent work that needs to be completed)

Another thing is that employees do not automatically have the right to use their annual leave to off-set their notice of resignation (we also found that many employees thought it would be alright to do so), although this is sometimes done with the consent of the employer. However, the employer still has the right (as per the employment contract) to require the employee to serve the notice in full and attend work every day until their official last day of employment. The option for the employee, if they do not want to serve the entire notice period is to make payment in lieu of notice.

Bear in mind that the waiver of any notice period is still at the employer’s mercy. Employees should not even has the mindset to think that an early exit is a matter of “right”, even if their annual leave shows balance.

Our advice to the employees out there – to understand and to have the right mindset on the annual leave and that you can always discuss and reach a mutual agreement with your respective employers in regards to the notice period and also the usage of your annual leave (balance).