When employees resign, a common question arises: “I haven’t used my annual leave; can I get paid for it?” This is a topic of dispute not only between workers and employers but also in many court cases. Understanding your rights regarding annual leave is crucial to protecting yourself in labor-related conflicts.

What is annual leave pay and what rights do employees have?

Annual leave pay is the salary equivalent to the number of unused paid leave days. According to the current Labor Code, any employee who works for 12 months is entitled to at least 12 days of paid leave per year. If the employee resigns or is dismissed without using all of their leave days, they have the right to request cash payment for the unused days.

How is this right regulated by law?

From May 1, 2013, Article 114 of the 2012 Labor Code clearly states: employees who resign or leave for other reasons without taking all their annual leave are entitled to a cash payout. Previous laws had similar provisions.

However, internal documents such as company labor regulations or collective labor agreements may specify particular rules about the usage and compensation of annual leave. As long as these internal rules do not contradict the law, they are considered valid.

When is the employee not entitled to receive payment for unused annual leave?

This is a key issue and often misunderstood. Many employees assume that unused leave is always paid out, but in reality, the law and court rulings require specific conditions:

Time limit for filing claims: Employees must request leave pay within one year from when the right arises. If filed later, the court may dismiss the case due to expiration of the statute of limitations.
Timing of resignation and request: If the employee was aware of their rights but failed to request payment in time, it may be deemed a waiver of that right.
Company regulations and collective agreements: If the company clearly stipulates that leave must be used within the year and cannot be carried over, employees need to comply with those terms.
Lack of clear evidence: If the employee lacks documents or proof of unused leave or prior payment requests, it’s highly likely the court will reject the claim.

What should employees do to protect their right to annual leave when resigning?

To protect their legal rights regarding annual leave pay, employees should be proactive in tracking, documenting, and requesting payouts at the appropriate time.

Understand the company’s regulations and collective labor agreements

Each company may have its own policy. If lawful and properly communicated, employees must follow them. Knowing these rules helps prevent losing entitlements due to lack of information.

Submit written requests at the right time

When resigning, employees should request confirmation of remaining leave and payment if applicable. This should be done before or right after leaving to avoid missing deadlines.

Keep documents, payslips, and internal emails related to leave

These serve as essential evidence if a dispute arises later.

Seek legal advice if a dispute arises

If the employee suspects unpaid leave after resignation, they should promptly contact a lawyer or legal firm to get advice on procedure and deadlines.

Court rejected a case: A lesson for employees

A labor dispute once tried in a provincial court showed that an employee resigned in 2016 and only requested payment for 65 unused leave days from 2008 to 2015 in 2020. The court rejected the claim because:

Company policy prohibited carry-over of annual leave.
The employee held a high-level position, understood the policy, but never requested payment.
The statute of limitations had expired.

This case is a strong reminder: understanding the law, acting in time, and having proof are essential to protect your rights.

Conclusion

Annual leave is a tangible right of employees, but to claim it legally, one must understand the law, observe deadlines, and take timely action. If you're planning to resign or already have and want to request leave pay, don’t delay.

DEDICA is your trusted partner with years of experience in handling labor disputes and protecting employees’ rights. We’re here to assess your situation, provide the right legal solution, and ensure you don’t miss out on your rightful benefits.

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