Let's consider the leave allowance refund for non-worked time and the payment of an indemnity of unused annual leave. See the beginning in Parts 1, 2.
The leave allowance refund for non-worked time
It is determined by the Law, that in case of dismissal of employee before the end of work year but the full duration leave has been received by him this year, to get out of the red the owner or his authorized body withholds wages for vacation days, which have been provided on account of non-worked part of the year. Let’s consider this statement in more details to understand by the example.
The employee was employed 10.10.2013. He used the basic right of full duration annual leave of 24 calendar days in July 2014 and received the leave allowance in the amount of 4 000 UAH. Later employee has provided a letter of resignation (from 09.05.2014). The employer should withhold a part of the leave allowance for non-worked time from 06.09.2014 to 09.10.2014.
The calculation: The work experience of the employee from 10.10.2013 to 05.09.2014 is 319 calendar days including holidays and legal public holidays.
Let’s define how many of leave days are accounted for by one calendar day:
24 ÷ (365 – 10) ≈ 0,0676.
We define the number of days that give the right to vacation:
319 × 0,0676 ≈ 22 (c.d.)
We define the number of days of unearned days of leave:
24 – 22 = 2 (c.d.)
We define the amount of the leave allowance that is subject to return:
2 × (4000 ÷ 24) = 333,33 UAH.
Thus, the employee should return the leave allowance in the amount of 333, 33 UAH. As a general rule, the amount is deducted from the payments and paid by the employer when the employee is dismissed.
Note also, that it’s not the subject to return in the following cases:
1) the call or join (enter) the army, referral to alternative (non-military) service;
2) reassignment of the employee with his consent to another company or transfer to elective position in cases which are provided for by the Law of Ukraine;
3) refusal of reassignment to work in another place with the company as well as refusal to continue working due to substantive changes of working conditions;
4) changes in the production and work management, including liquidation, restructuring or reorientation of the company, reduction in the number of employees or staff size;
5) identification of mismatch of staff member or his work due to incompetence or level of health that brakes the continuation of this work;
6) absence at work more than four consecutive months due to temporary invalidity, excluding maternity leave, if the more long-term preservation of job (position) in case of certain disease is not approved by the legislation;
7) reinstatement of the employee, who has previously executed this work;
8) student assignment;
9) retirement or death;
The payment of an indemnity of unused annual leave
A part of annual leave should be monetized at the request of the employee, it is also provided for by the Law. In addition, the duration of the annual leave and additional leave, which are granted to the employee should not be less than 24 calendar days. Thus, principal condition for obtaining of cash indemnity of annual leave part is mandatory usage of 24 calendar days of annual leave by the employee.
Also, such indemnity is paid to the employee in case of his dismissal for all unused annual leave days as well as the additional leave to the employee, who have children. It should be noted that it doesn’t matter in this case whether the employee was on leave 24 calendar days.
The calculation of cash indemnity is made by the same algorithm as for the determination of the leave allowance amount.
