Congratulation! You landed yourself a new job. You have in your hand the signed letter of employment. You are delighted.
You want to have a good ending with your present employment and have a perfect start with your new employer.
Hoo…hooo… Now you only have to inform your new employer when you can start work with them and to resign from your present job. It’s so easy, right? Not so, you may ‘kena’ hit by “offset”.
Let me explain why “offset” can be wrong word to use when you want to resign from your present employment.
Let’s start by assuming that you are required to give 1-month notice and you think you have about 5 days of unconsumed annual leave yet to clear.
You want to have a short break before you start your new job. You have about 5 days of annual leave plus (say) a weekend, you are happy that you can have that good rest before your new challenge begins.
So you decided to tender your resignation on the first day of the coming month and to join your new employer on the first day of the following month.
You are ready to pen your resignation letter. Hang on… let’s review the “Employment Practices: Termination of Employment” on MOM website. It stipulates:
Using Annual Leave to Offset Notice
You can use your annual leave to offset the notice period in order to bring forward your last day of employment. In this case:
- You would only be paid up to your last day of work.
- The annual leave used to offset the notice will not be paid.
- After your last day, you can start work immediately with your new company.
Taking Approved Leave During The Notice Period
However, using annual leave to offset the notice period is not the same as taking approved leave during the notice period.
If you apply for annual leave during your notice period, and your employer approves it:
- You will be paid for the full notice period.
- You are considered an employee until the last day.
- You cannot join a new company until the notice period is over.
Given that you are giving a month notice period and you want to take a break before joining the new company, you wrote your resignation letter and submitted it to your boss. Your human resource department acknowledged your resignation and let you know your balance annual leave and your last day work. Two situations can happen:
You indicated in your resignation letter that you would like to use your annual leave to offset your notice.
Your human resource department confirmed that you indeed have a balance 5-day annual leaves. Assuming that the month you served notice is a 30-day month, your last day of employment with your employer will be on the 25th day. You will be paid for 25 days in that month.
You then take your break and join the new company on the first day of the following month.
You simply submitted your resignation letter giving a month notice without mentioning “offsetting” your leave.
Likewise your human resource department confirmed your balance leave, let you know your last day of work will be on the 30th day of the notice month. You will be paid for the full notice period, i.e. 30 days. You will have to agree with your boss whether you can clear your balance leave during the notice period.
If your boss do not allow you to clear your 5-day leave, your company will have to pay you additional for these unconsumed annual leave.
Once again, using annual leave to offset the notice period is not the same as taking approved leave during the notice period. I am sharing this blog so that you never ever kena offset again.
Lastly, two more points…
- The notice period includes the day on which the notice is given.
- If you are covered under the Employment Act, and you take sick leave (paid or unpaid) during the notice period, it is treated as part of the notice period. Your employer cannot extend your notice period or claim for any short notice from you.