How does it work?

Statutory annual leave  is paid time off work granted by Employers to employees. It is essential to note that the Employer is statutorily obliged to provide a certain amount of annual leave to his/her employee.

An Employer can offer more leave than statutorily obliged. If an Employer offers more leave to employees with longer service or employees who exceed targets. For instance, this policy should be clearly defined. It should be applied fairly across the board. Regardless of the employee’s status or length of service, everyone is entitled to paid time off, whether they are full-time, part-time, temporary, or casual workers.

How can you manage your employee’s annual leave?

The spread of Coronavirus (Covid-19) has had many adverse impacts on businesses. One of these impacts being the accrual of Annual Leave for employees.

An employee accrues annual leave for any hours worked. If an employee has been laid off, they do not accumulate it during this period. Please note, employees accrue public holiday entitlements during the first 13 weeks on lay-off. A part-time employee will only qualify for a public holiday benefit if the employee has worked 40 hours in the five weeks preceding the public holiday.

The Organisation of Working Time Act 1997 states that the Employer has the final decision concerning the timing of annual leave. Therefore, an Employer can ‘assign’ annual for the employee to take, providing they give one month’s notice of such request. Similarly, they can decline cancellation requests of pre-booked their leave. However, an organisation needs to take a reasonable approach and consider the Governments restrictions to travel and self-isolation.

The essence of the Act is for the employee to avail of rest and recreation. The Employer should strongly consider this in the context of the current situation. You should consider an employee’s well-being and if they would benefit from taking annual leave during this time.

A vast majority of employees will have annual leave entitlements remaining for 2020; this will not be easy to manage for many businesses. To achieve this successfully, we recommend the following:

  • Annual Leave Policy – communicate the details of this policy to your employees. This policy expressly sets out an employees’ entitlement to paid leave, identifies the relevant leave year period and accurately details its approach to carryover of accrued but untaken leave. Please note, statutory leave needs to be taken and should not be paid to the employee instead. Any annual leave over the statutory entitlement can be paid.

  • Communication – inform your employees that everyone still has annual leave to take in a limited amount of time. Remind them, that it needs to be approved by management before they book any time off. It is imperative to ensure continuity of business which will not be possible if everybody is absent at the same time. Managers can deny the leave requests within reason, and the period allocated should suit both the business and employee where possible.

  • Reminders – you can keep track of an employee’s annual leave entitlement using a tracker. Where an employee still has Annual Leave remaining, you can issue them with reminders, primarily as the relevant leave year draws to a close.

  • Encouragement – actively encourage staff to take annual leave. It may be advisable for you to meet with individual employees who have a substantial number of leave untaken. A record of these conversations should be kept on their file

Employers are not required to force employees to take annual leave, but they must be able to show they have attempted to encourage their employee to take it. This means that employees must be:

  • Fully informed of their entitlements

  • Actively encouraged them to take their annual leave

  • Advised that the Company will require them to take their holiday at a specific time
Given the unusual circumstances of the COVID-19 crisis, many employees may carry over annual leave entitlements to 2021. If this is the case, their remaining holiday leave should be used within the first six months of that year.

 

Do you require further assistance for your business? Book a free consultation with our HR Advisors: