Cashing Out Annual Leave in Indonesia is possible, but is it even wise? Read more to find out the possibility.
The Article 79 (2) of Indonesian Law Number 13/2003 regarding Labor Law has made it clear. Employees are entitled to have 12 days of annual leave every year.
Of course, this entitlement is granted after they have worked for consecutive 12 months. (This means, no sick leaves in the middle).
Still, how about cashing out annual leave?
Before we go straight to the topic, here is another one that you should know: Article 5 (2) of Government Law Number 21/1954 regarding Determination of Regulation of Labor Rest, employers also have the right to postpone your leave request as an employee for six months maximum.
Although this sounds unpleasant, they actually do if there is an evidence that has something to do with the interest of the company.
For example: The company is understaffed and there is still a lot of work to be done. If you choose to leave in the middle of this, then they will surely be overwhelmed. Another example is when you have not fulfilled the requirements for your leave request to be approved, like you have not worked for 12 months nonstop.
Still, this is also impossible to fulfil, because it is often not beneficial for employees and the company.
Because of this, some employees consider the idea of cashing out annual leave.
Not only they feel like they cannot go anywhere at the moment, they also need some quick money for something else.
The question is: is it possible to do so?
Although this may occur in some other countries like Australia, it is not the same case with Indonesia. The untaken annual leave will expire in six months after the employee has requested for it.
There is no regulation regarding a compensation to the lost annual leave, although the employer of the company and the employees may agree on a special term.
Is It Wise to Cash Out Your Annual Leave?
Despite the possibility of striking out this deal with your employee, cashing out annual leave may not always be a good idea. According to The Huffington Post Australia, it may trigger people to be such workaholics.
Director of Employee Matters, Natasha Hawker, has even agreed with this:
“I think it’s really important to give people the opportunity to rejuvenate and reflect by taking time off.”
Because of this, more people work harder than ever. The digital-based policy also does not really help matters. Although they are not always physically at work, their minds still are.
This is even more critical for them to really take their break instead of cashing it. After all, their annual leave is part of their rights as employees of the company.
“Well-rested people sharing the joys of their holidays means a more motivated, happy workplace,”
Source: https://bplawyers.co.id/en/2018/07/24/interesting-facts-the-annual-leave-of-employees-in-indonesia/
Hawker also added. This means a positive impact on the company, since employees are usually more productive after enjoying their break from work. It is good to be productive, but it is even better when you are really happy doing it.
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