When the contract of employment is terminated, the employer shall pay the employee not only the indemnity related to the annual leave which he should have benefited from had he remained at work, but also an amount equal to 4% or 6% of the total earnings accumulated during the current reference year.

Example

• Gross wages earned during the previous reference year = $30,000
• Gross wages earned during the current reference year prior to the calculation of the indemnity = $8,200

(The notion of "gross wages" is examined in the interpretation of section 74 ALS.)

Calculation of the indemnity

$30,000 x 6% = $1,800
$8,200 (gross wages earned during the current reference year)
+ $1,800  (aforementioned indemnity)
= $10,000  (gross wages for the current reference year)
$10,000 x 6%= $600

Total indemnity

($1,800 + $ 600) = $2,400