I am not sure it is correct actually. Although i can’t find the clause in the Labour law which defines this. But in my experience this is my judgement:

1st Jan 07 he commences work, 1st Jan 08 he completes one year, and as such is entitled to 4 weeks paid leave. (or whatever his contract says) The 4 weeks are obviously taken in 2008. As far as contract law is concerned there is no distinction made between time spent in the office and time spent on paid leave, therefore his 2008 leave is based upon 1st Jan 08 – 1st Jan 09.

His end of service benefits are also calculated on this basis.