Scientific approaches, national legislation and international experience have been studied. The historical development of annual leave arrangements has been disclosed. It is discovered that annual leave belongs to such greater categories as: nonworking time, rest time and leave. Nonworking time is opposite to working time and includes all time frames wherein an employee is free of labor duties. Rest time is time, which is secured by the legislation, agreement, collective contract or labor contract, and which is provided for an employee to guarantee his rest and the renovation of his efficiency. Leave is a temporary freeing of an employee from labor duties, counted by calendar days, for which conditions are guaranteed by legislation, agreement, collective or labor contract. It's proved that usage of annual leave should be a duty of an employee. If he fails to discharge this duty, disciplinary measures can be applied to him. Characteristics of annual leave have been ascertained, based upon which the following definition is offered: annual leave is a paid leave, which is granted to an employee for a worked year for the rest and renovation of his efficiency, a leave right arises at the beginning of each working year, commencing from the first year; terms of its usage are established by agreement between an employer and an employee. It is shown that subjective criteria should be used to determine episodes of prolonged annual leaves, when objective criteria should be used for additional annual leave. In such way any employee will have a right for annual leave of standard or prolonged duration, with no connection to his working place. If he completes a special labor function, a right for additional annual leave arises for such an employee. Rights and duties of both sides of labor relations are elucidated to establish terms for the granting of annual leave. It is proposed that prolonged annual leave should be granted to employees of pensioner age. It is also proposed to establish a longer duration of annual leave for group I invalids than for group II invalids. Based on the analysis of court practice, it is proved that in case of termination of the labor contract before completion of the working year, an employee should refund monies paid to him for annual leave on a pro rata basis. This rule protects employers' interests while allowing for annual leave to be granted at any time from the commencement of the first working year. Such main guarantees of right for annual leave have been discovered: saving of conditions of a labor contract; a payment, which equals to the salary for the same period of work; a prohibition to give money compensation instead of usage of annual leave, except of cases, prescribed by a legislation; a prohibition do not give an annual leave two years in a row; allowance to use an annual leave by parts; guarantees, which secure employee's rights in case of his recall from the annual leave; rules of changing terms of annual leaves in prescribed cases. Based on the derived theoretical results, legislative proposals have been formulated. Additionally, a project of a chapter entitled "Annual Leaves" have been produced, which can be used during work on the new Labor Code.
