The Workers’ Rights Act 2019 (“Act”) came into force on 24^th of October 2019, and represents a hallmark legal framework for the regulation of labour and employment in Mauritius. Section 47 of the Act introduced a novel entitlement to vacation leave for workers, inasmuch as the Act extended the existing vacation regime provided for certain sectors governed by Remuneration Regulations, to all sectors (“Vacation Leave”).

The Act restricts the entitlement to someone defined as a “worker”, whose significant characteristics include earning a basic wage or salary at a rate of less or equal to MUR 600,000 annually (or MUR 50,000 monthly) (“Worker”).

This entitlement does not encompass migrants and applies to Workers who have been continuously employed by the same employer for at least five (5) consecutive years, starting as from the coming into force of the Act. The entitlement for Vacation Leave will kick in as from the 24^th of October 2024. Such leave accrues at a rate of up to 30 days for every 5 years employed and may be spent overseas, locally or both. The Vacation Leave will be with pay and such pay shall, in case the Worker opts to spend the leave wholly or partly abroad, be effected at least seven (7) working days before the Worker proceeds abroad.

While this development represents undoubted social progress for Mauritian Workers, the section’s unfortunate drafting allowed during the last five years for lingering uncertainties as to its practical application in various employment scenarios, to the great dismay of employers and Workers alike. The Act does not seem to lay out the modus operandi to apply for Vacation Leave which gives rise to queries such as should the application be made in advance and if yes, how many days/months in advance? Can the employer compensate the Worker financially in case the business does not allow the employer to grant the Vacation Leave to the Worker?

Fortunately, we see that the Finance (Miscellaneous Provisions) Bill 2024 (“Finance Bill”) has recently come in to address certain of these issues.  To start with, the Finance Bill specifies that the Vacation Leave should be taken for a period of not less than six (6) consecutive days. This will help the employer to better organise his business as well as manpower within the enterprise. The Finance Bill also addresses the crucial issue of notice period. Under the Finance Bill, when applying for the Vacation Leave, a Worker has to give at least three (3) months’ notice to his employer and the latter, subject to reasonable business grounds, shall approve the application. The Finance Bill goes further to provide a definition of ‘reasonable business grounds’ as:

(a) inability or impracticability to reorganise working arrangements of existing workers;

(b) a detrimental effect on the ability to meet customers’ demand.

The Finance Bill also tackles the essential question which most employers had been asking themselves lately, that is, whether the employer can financially compensate the Worker in case he cannot grant the Vacation leave on reasonable business grounds. We note that in such a case, the Finance Bill provides that the Worker and the employer may either mutually agree on another period when the Vacation Leave is to be taken or in default of an agreement, the employer shall pay to the Worker a normal day’s wage in respect of each day’s leave applied for and such payment shall be effected in the month that the leave was due to start.

To complete the compensation part, the Finance Bill further provides that any subsequent eligibility period of five (5) consecutive years shall be computed as from the date of payment by the employer. Although the Finance Bill does not specifically provide for same, we understand that the subsequent eligibility period would start to run when the whole 30 days’ entitlement would have been taken or paid.

Whilst the Finance Bill 2024 has tackled many questions which were arising from the interpretation of section 47 of the Act on Vacation Leave, one fundamental issue has not been addressed, that is, whether to treat Vacation Leave as an acquired right or a status-related benefit. As an acquired right, entitlement to leave, once vested with the person subject to them meeting relevant conditions, will carry forward so long as they remain employed with the same employer. This means that a Worker who, having completed five (5) years of continuous employment with the same employer, would become entitled to the Vacation Leave, irrespective of any status change in the foreseeable future, up and until this entitlement would have been taken by the person. Such treatment would imply that someone who, at some point in their tenure, met the requirements for entitlement to Vacation Leave – including earning a basic salary of less than MUR 50,000 – but was subsequently promoted to earn a basic monthly salary above the MUR 50,000 threshold (say MRU 60,000), after the 24^th of October 2024, could still exercise his entitlement post-promotion, even though he no longer technically falls within the definition of “Worker” by that point.

On the other hand, as a status-related benefit, the Vacation Leave would be available to a Worker, only if he meets the requirements of eligibility at the time of taking the said leave. As such, the promotee who was earning a basic monthly salary of less than MUR 50,000 as at 24^th of October 2024 but is now earning a basic salary above MUR 50,000 and has not yet taken his Vacation Leave, is effectively “punished” by having his leave entitlement withdrawn; such an outcome not only defies the basic logic of promoting someone, but can further induce tactical calculus by employers as to the choice of timing for salary increases within their workforce planning practices. While the former interpretation of a portable “acquired right” seems appealing and palatable, the definition of “Worker” under the Act suggests that from the moment the rate at which the employee earns a basic salary which exceeds MUR 600,000 annually, his entitlement under section 47 no longer applies. Settling this fundamental issue once and for all would be a definite plus.

Since the spirit of labour law accepts the employer as broadly responsible for the organisation of work, clarifications as to whether the Vacation Leave is an acquired right or whether the entitlement to Vacation Leave is only when the Worker meets all the defining criteria at the time that he is taking his Vacation Leave, can only reinforce the better business organisation of the employer.  

Ahead of the forthcoming Finance Act 2024-2025, and possibly also a new electoral cycle, legal amendments to section 47 of the Act will certainly serve as a definite step forward in clarifying the existing labour legislation in connection with Vacation Leave.

Food for thoughts for employers - To adopt the Vacation Leave entitlement for employees earning a basic monthly salary above MUR 50,000, having in mind that this can be an incentive for employees to remain in employment with the same employer for at least five (5) consecutive years.