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he shall be entitled to pay in lieu of any unused annual leave entitlement,
This is clearly stated out in the employment letter. However, you have to check with office rules or other documents the maximum leave entitlement that could be carried forward. Some company has a house rule or mutual agreement that the leave entitlements could only be carried forward say, for 30 days. That is why some company requires or insist staff member to take the annual leave. In your case, it is over 3 year's entitlement, you better check with other sources for any such requirement by the company duly noted and agreed by an employee.