Successfully Handling Annual Leave

Under normal circumstances at work, employees generally book and take their annual leave throughout the year spreading the cost of that leave evenly. This also allows employers to cover for their inevitable absence effectively.

But what if it has just not been that straightforward?

What is the Statutory Right regarding Annual Leave?

Holiday entitlement under employment legislation is detailed in the Working Time (Amendment) Regulations 2007 which came into effect on 1^st April 2009. Employees (and Workers) are covered by this legislation. The minimum statutory requirement for a full-time employee is 28 days or 5.6 weeks including bank holidays. Of course, employers can offer more annual leave, but they must not offer less than this and they should not ‘buy out’ annual leave or ‘top up’ pay to allow for it.

What else should I know about Annual Leave?

Well, there are a few other things:

Full-time employees (and workers) entitlement to annual leave usually accrues at approximately 2.33 days per month during the first year of employment.
Part-time employees (and workers) are entitled to the same as full-time workers, but it is ‘pro-rated’ to their working hours.
A Contract of Employment should stipulate how public holidays are included in the annual leave entitlement. Some companies choose to separate them because it suits their operational requirements more effectively.
Employers stay in control of when and how annual leave is booked and taken, not the other way around. Taking unauthorised leave could be a disciplinary offence.
Employers can agree to unpaid holiday or they may offer time-off-in-lieu if additional hours worked. They can also agree to ‘carry-over’ some unused annual leave or operate a flexible way of taking it.
The law about the calculation of pay during periods of annual leave has changed significantly, so seek advice if you are not sure how to pay your employees during periods of annual leave.

Are you dealing with ‘backed up’ annual leave?

This is where there is more leave left in your annual leave year than you can actually allow your employees to take. There could be a number of reasons for this, but it is worth reviewing how much leave is left for each employee at least three months before the end of your Leave Year.

Employers always remain in the control seat when agreeing for their employees to take time off. You can ask employees to take their leave when it suits your business as long as you give them the required statutory notice. This is double the number of days to take in leave (plus one day) so if your employee has 5 days that you want them to take you must give the employee at least 11 days’ notice that you would like them to take it and tell them when you would like the leave to be taken.

Can I force employees to take annual leave?

Yes, you can. This is defined in the Working Time Regulations 1998. An employer can instruct a worker to take annual leave by giving notice that is at least twice the duration of the leave that must be taken. That means four weeks’ notice for leave of two weeks duration. If your business closes during a Christmas period, for example, you can also instruct your employees to ‘save the days’ so they do not use more than their annual entitlement.

You can also ask an employee to take outstanding annual leave during notice periods if they have resigned or if your contract of employment specifically states that this can happen.

What steps can I take if my employees have too much leave to use up?

This is a practical decision for each business to make depending on the circumstances of that business.

For those facing challenges due to accrued annual leave, our recommendation would be to think creatively and work with your employees for a resolution that works for both sides. Here are a few suggestions:

If it is practical to allow leave to be ‘carried over’ due to exceptional circumstances that is likely to be received positively by your employees. Remember, you remain in the ‘driving seat’ and you can set rules about how and when it should be taken. You can also schedule times in the New Year when the leave should be taken or by when it should be used up or lost.
You could consider a temporary change to your holiday rules if you have had an exceptionally busy year. You can request that your employees take leave at specified times as long as you give them the required notice of at least twice the duration of the leave that must be taken.
You can request final submissions for all leave requests by a specific date on a first come first served basis so that you can plan the absences against business requirements
You can use an online booking tool such as Breathe HR so that you can immediately see how leave is working out for the whole company at a glance.
You can pay it instead or ‘buy it out’? … this is a possibility but of last resort and may need a little more guidance to avoid a ‘trip hazard’.

Should I ‘buy out’ annual leave?

No, this is not advisable (or legal) unless your employee is leaving, or you are terminating employment. This is because annual leave is specifically to allow for employees to take ‘rest and recuperation’ from work. If they have worked so hard it has not been possible for them to take their leave, they are likely to be extremely tired and this is when accidents can happen. Believe it or not, annual leave is a health and safety requirement … many employers forget this.

Do you have holiday rules or a holiday policy?

If not, let us help you create one and put it in place for you

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yvonne@olyvetree.com