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Unable to travel, employees struggle to clear unused annual leave while some firms adjust policies

Unable to travel, employees struggle to clear unused annual leave while some firms adjust policies

FILE PHOTO: People wearing protective face masks walk at Singapore's Changi Airport, following the outbreak of COVID-1 on Mar 30, 2020. (Photo: REUTERS/Edgar Su)

SINGAPORE: Many employees are struggling to clear their days of annual leave, said human resource experts, as COVID-19 travel restrictions prevent Singaporeans from going overseas for leisure.

Some employees have tried to save up their unused leave days to bring them forward to the next year, but the lack of a break from work could take a toll on their mental and physical health, experts told CNA.

“Many employees tend to not take annual leave when they are working from home, as they do not feel like they need a ‘getaway’ from the office environment,” said Ms Jaya Dass, Randstad’s managing director for Singapore and Malaysia.

“However, not taking leave for a long period of time can impact energy levels, mental health and overall well-being,” she said, adding that this could lead to employee burnout.

Over-working could also cause higher stress levels, more health problems, as well as reduced creativity and performance, said Robert Walters South East Asia HR director Tricia Tan, factors which could reduce productivity.

READ: 'A necessary investment': Why firms choose to cover employees for mental health services

READ: Rise in firms offering mental health support for staff but more can be done, say experts

Employees hoarding and carrying forward their unused leave days is also an issue for companies, noted Ms Dass, as firms would have to register those unused leave days as a financial liability in the profit and loss statements.

And this might not be a feasible option for start-ups and small- and medium-size enterprises (SMEs) that usually have a lower cash flow, she said.

If companies allow employees to bring forward their unused leave to the next year, it could lead to a “drastic drop” in the workforce when leisure travel can resume.

“This would affect productivity levels and increase stress on the employees who have to take on more workload,” Ms Dass added.


To address the issue of unused leave, Nanyang Technological University (NTU) introduced an initiative to allow employees to donate their leave days to raise money for student aid.

It announced in November that employees donated more than 20,000 days of unused leave worth S$10.25 million.

The voluntary donations were made by 1,821 faculty and staff members, with each employee contributing an average of 11 days. The highest donation was 15 days of leave. 

READ: NTU staff donate more than 20,000 days of unused annual leave to raise money for student aid

This could be a viable option for firms, but only if it is a voluntary option for employees, said Ms Dass.

“It will not be good for employee morale if it is made mandatory that they have to give up their annual leave, especially if they are allowed to carry forward some to 2021,” she added.

Re-encashment of unused leave towards charitable purposes sets the “right intention”, said Ms Tan.

That aside, companies that allow the encashment of leave in light of the COVID-19 situation could be setting a precedent where employees might think this is an option in future, she warned.

It could drive “wrong behaviours around hoarding leave so that they can encash it at the year-end”, she added.

Encashment costs money, which will place financial strain on businesses that are already struggling, Ms Tan said, adding that the priority at the moment should be on ensuring that business operations can continue viably so that employees will continue to have a job.


Other options companies can look into include allowing a portion of annual leave to be carried over to the next year to be cleared within a set time period, or enforcing block leave.

Companies can also allow employees to use their annual leave as flexible credits for benefits such as self-improvement courses, counselling, health screening, yoga and gym classes as well as health supplements, said Ms Tan.

The last option is to forfeit the leave, she added, but this is the “worst case scenario” that companies should avoid “as it opens up feelings of discontent and unfairness”.

Some companies told CNA that they have adjusted their leave policies given the unprecedented situation brought about by COVID-19.

Mr Ernest Phang, OCBC’s head of corporate services of group human resources, said that the company recognises the “exceptional year” due to the pandemic.

“This year, our employees would be able to carry forward additional days of their annual leave to 2021 (from the current seven days to 12 days) or choose to encash some days (up to five days) of their annual leave,” he said.

In addition, employees on the OCBC Flex Plan will continue to be able to convert up to three days of their leave for credits, which can be used to reimburse co-payment of medical expenses for themselves or their family members, insurance premiums, wellness and other personal expenses.

UOB’s head of group human resources Dean Tong said that the bank increased the number of unused annual leave days that can be carried over into 2021, from 10 to 14 days.

The bank also revised its employee care programme this year to allow staff members to use up to two days of annual leave carried forward to offset any expenses. Previously, this applied only to health and wellness expenses.

A Keppel spokesperson told CNA that the conglomerate’s policy allows unused leave to be carried forward to the following year, up to a maximum of one year’s provision.

“We encourage our employees to consume their annual leave and take days off to unwind and recharge,” the spokesperson said.

Ultimately, it is up to the line managers is ensure that employees use their annual leave and take time to recharge and disconnect from work, said Ms Tan.

“As a line manager, practising what you preach is important - leading by example and setting the tone of the importance of time off,” she added.

On the need to disconnect from work, she said: “We should not neglect the fact that annual leave is set out with the key intention and purpose of allowing employees to take time off work to rest, renew themselves physically and mentally.”

Source: CNA/cc(gs)