Policies & Procedures

The issue of age discrimination has become a significant one in Ireland in this extremely litigious era – it is imperative that employers are very careful in all they say, write and do in relation to age if they aim to avoid a discrimination claim. 

Discrimination is defined as the treatment of one person in a less favourable way than another person in a comparable situation on any of the nine specific grounds. It covers not only current and past discrimination but also discrimination that may exist in the future or is imputed to a person.

The Employment Equality Acts 1998-2011 prohibit discrimination in employment based on a person’s age as well as eight other grounds (gender, civil status, family status, sexual orientation, religion, disability, race and membership of the Traveller community). The Equality Authority, in some instances, will provide assistance to individuals who feel as though they have been discriminated against in their employment.

The Equality Tribunal is charged with investigating alleged discrimination on any of the nine grounds and ensures the relevant employment legislation is implemented correctly. The Equality Tribunal can enforce a means of redress or compensation in favour of the employee.

Discrimination based on age commonly occurs at the recruitment stage and in the course of the interview and selection process. The Acts outlaw discrimination in job advertisements and therefore employers need to be extremely careful when drafting such advertisements. An employer cannot seek a “young and dynamic employee” as this excludes several candidates who are not “young” – all interested parties should have equal right to be considered for the role. Similarly, employers should not make it compulsory for applicants to provide their age or date of birth when applying for a job.

It is also frequent in the area of promotion or in redundancy scenarios. An employee cannot be made redundant in order to make way for a “younger” employee.

Employers are entitled to implement certain policies under the Acts, for instance, an employer may set a minimum age requirement (not more than 18 years of age) for potential applicants for a job. The employer can also set a compulsory retirement age but this must be clear and fair for all employees based on their role.

In relation to retirement ages an employer should have a policy in place that covers this. He or she should ensure that the compulsory retirement age is referred to in the contract of employment as well as including a very detailed description of the policy in the company handbook – employees should be required to confirm in writing that they have read and accept the employee handbook.

A Retirement Policy should, at a very minimum, confirm the age at which employees must retire. It should also include a timeline detailing what happens in the run up to the retirement date. For instance, when the employee should expect to be advised of their precise retirement date and details of who they should expect to receive this information from.

Some employers will provide that a member of the HR department meets the employee who is set to retire in order to discuss items like outstanding annual leave, handover procedures, return of company equipment, how any benefits or benefits-in-kind may be managed (a company car, for example, if applicable).

Some companies will also assist the employee who is retiring by providing a pre-retirement course in advance of their departure or by discussing pensions and other financial matters with the individual. It could benefit the employee to meet with a financial advisor in the run up to the employee’s retirement - this is something that the employer could provide. If the employee offers this the option to meet a financial advisor (or similar) it should be detailed in the employee handbook.

The effective management of the retirement process will support the employee in the final stages of their employment with the company and will protect the employer by enabling the appropriate transfer of valuable knowledge from the departing employee to the company.

 

 

Companies may offer a fixed-term contract to a person over the compulsory retirement age but there is no obligation on them to do so.

Often the Tribunal finds in favour of the employee in cases relating to discrimination in the workplace, however, one notable age related case was dismissed by the Equality Tribunal when evidence that the employer had an established policy with regard to retirement age and had included retirement age in the contract of employment was provided.

The relevant case decision number is DEC-E2012-086.

Mr. X argued that his former employer had discriminated against him on the basis of age when he was forced to retire at the age of 65. Mr. X had worked for his employer for more than 10 years prior to turning 65. Mr. X, along with his colleagues, were informed of his departure date via e-mail when an invitation to a social event to mark Mr. X’s retirement was sent out.

Mr. X did not want to retire and argued that he was being directly discriminated against on the basis of his age. The employer refuted Mr. X’s allegation and argued that the retirement age of 65 was a “clear term and condition of the contract of employment of employees and a long-standing custom and practice”.

Mr. X’s claim failed as the Tribunal found that his former employer had a “well established practice of retiring its employees” at the age of 65. In certain instances employees who were over 65 were re-engaged on fixed-term contracts for project purposes but that wasn’t the case in all circumstances and it was not the case with Mr. X.

It was an interesting determination from an employer perspective.

Lots of difficult situations present themselves for employers on a regular basis - The HR Company aims to assist employers with their challenging role by giving pratical advice on all HR related activities -

 

One of our consultants was asked a question by an employer about redundancy -

Unfortunately, with the recent economic climate, my business simply doesn't justify eleven employees anymore. Things have become very quiet for us and I am struggling to make ends meet. I feel I need to get down to approximately seven employees to ride-out the downturn. What is the process that I should follow in order to stay compliant in this situation? 

 

 

The HR Company advice: 

Many companies are finding themselves in similar situations in this economy. Initially, the owner should determine if this quiet period is one that is expected to be short term or longer term. If the quiet period is expected to be for a few weeks or months the owner should consider placing employees on reduced working hours or possibly laying off some staff for the short term.

Alternatively, if the business cannot sustain the number of employees they currently hold, then redundancies will need to be considered. All other avenues should be exhausted prior to making the decision to make positions redundant. There is a strict redundancy selection process that has to be followed when making job roles redundant. Remember that it is the role that is made redundant rather than the employee – One cannot make an employee redundant and then hire a replacement in their role the next day.

 

Common employer pitfall:

If a business does not engage with introducing any of these measures with employees in the correct way, the employee may leave the company (i.e. if on a short working week or on lay-off) and claim Constructive Dismissal which could see the employee awarded a large sum. If the correct redundancy process is not followed a former employee may make a claim of Unfair Dismissal or Unfair Selection for Redundancy which can run to high costs for your business in the long run.

 

 

The Protected Disclosure Bill 2013 was published on July 3^rd 2013 by Minister for Public Expenditure and Reform, Brendan Howlin, T.D. The Bill is to establish a comprehensive legislative framework protecting whistleblowers in all industries in Ireland. The purpose of the legislation is to protect workers who raise concerns regarding wrongdoing (or potential wrongdoing) that they have become aware of in the workplace. The Bill will offer significant employment and other protections to whistleblowers if they suffer any penalties at the hands of their employer for coming forward with information of wrongdoing in the workplace.   The legislation, which is due to be enacted in the autumn, closely reflects best practices in whistleblowing protection in developed nations around the world. According to Minister Howlin the Bill “should instil all workers with confidence that should they ever need to take that decisive step and speak-up on concerns that they have about possible misconduct in the workplace, they will find that society values their actions as entirely legitimate, appropriate and in the public interest”. Some key elements included in the Bill are as follows: Compensation of up to a maximum of five years remuneration can be awarded in the case of an unfair dismissal that came about as a result of making a protected disclosure. This would be a massive step forward in Ireland’s attempt to match the standards set by other established nations. It is important to note that limitations relating to the length of service that usually apply in the case of Unfair Dismissals are set aside in the case of protected disclosures. As a result of this Bill whistleblowers will benefit from civil immunity from actions for damages and a qualified privilege under defamation law. The legislation provides a number of disclosure channels for potential whistleblowers and stresses that the disclosure, rather than the whistleblower, should be the focus of the attention. Protections for the whistleblower remain in place even where the information disclosed does not reveal any wrongdoing when examined. Deliberate false reporting, however, will not be protected. These measures, when enacted, should encourage more people to come forward, and feel comfortable doing so, when they become aware of (or suspect) any criminal activity, misconduct or wrongdoing in the workplace.

The Minister for Finance, Michael Noonan T.D., published the Finance Bill 2013 on 13^th February 2013. The Bill provided for the Budget day announcement that, effective 1^st July 2013, Maternity Benefit, Adoptive Benefit and Health & Safety Benefit payments will be treated as taxable income. As with all other Social Welfare payments; Maternity, Adoptive and Health and Safety Benefit will remain exempt from Pay Related Social Insurance (PRSI) and Universal Social Charge (USC). 

 

This measure will mean that women entitled to these benefits will pay the same level of income tax while in receipt of the benefit as they do when they are working.

Once the benefit is approved by the Department of Social Protection, Revenue will be notified of the applicable figure and will reduce the relevant allowances (tax credit and standard rate cut-off point in respect of the employee) accordingly. Revenue will notify the employer or pension provider of the applicable adjustment by means of a new P2C in respect of the employee. The P2C is the employer copy of the employee tax certificate.

The issuance of a revised P2C is the only thing that the employer needs to be actively aware of in relation to maternity or adoptive benefit. However, since the employer pays the first 21 days of the Health and Safety benefit the new taxation provided for in the Finance Bill may have more of an impact on the employer and the payroll administrator here.

The net income paid to the recipient for the period is going to be reduced by the new taxation. Consequently, one significant result of this new provision might be mothers/expecting mothers availing of reduced periods of maternity/adoptive leave.

For organisations that require face-to-face, on-site HR support, we provide the services listed below, which have been categorised into five distinct components. Depending on the level of your requirement, we do this by either putting HR specialist(s) into your business on a permanent basis, or we provide you with full remote back-up complemented by regular site visits.

1. Legal

It is critically important that when one addresses any of the core HR activities, they must be carried out within the confines of the legal framework that exists. We will advise you to ensure that you are complying with all current legislation.

2. Mediation Services

We provide a full range of mediation services whereby we resolve many internal employee and industrial relations issues that arise within the workplace. This can include direct negotiations with solicitors, third parties and trade unions.

3. Staff Retention and Benefits

We assist you to ensure that you do what is necessary to keep your employees within the organisation. This covers the entire area of salary planning, benefits planning, benefits administration, performance management and face-to-face group meetings, or one-on-one discussions.

4. Recruitment

This involves us in the hiring process from the very beginning, from writing up job profiles and descriptions to advertising, arranging interviews, checking references, and issuing contracts.

5. Training and Development

The service we offer in this space includes identifying training requirements, driving the training programme and the training vendors, right through to succession planning, key people identification, skills identification and management development.

The Smart Solution for Businesses - We aim to ensure that you, our client, are not constrained by the legislation that exists today, but are aware of it and acting in accordance with it.

The service includes salary surveys to support your salary planning and review process, design and implementation of your policies and procedures and inclusion of these in the company handbook.

As part of this service, a company is provided with on-site representation approximately once per month.

In this era of increased employee litigation the Labour Court has thousands of cases waiting to be heard - In a huge number of these cases the employer will end up paying substantial sums in compensation to employees (or former employees). In a lot of instances the award will be made as a result of the employer failing to follow appropriate procedures when dealing with an employee.

Unfortunately, the onus is on the employer to prove that he or she acted in a fair manner - the motives behind his or her decisions will be scrutinised. Everything must be justified.

On a daily basis we hear of Unfair Dismissal cases succeeding - the rulings are regularly shocking... even to Irish Employment Law professionals. We see employers being forced to pay huge sums due to the occurrence of harassment/bullying - often the employer is not even aware that such an activity is taking place - yet it is the responsibility of the employer to ensure that this type of situation does not arise in their workplace.

A recent example of harassment in the workplace occurred in a fast food company in Blackpool, Cork where two employees were subjected to sexual harassment by another employee.

An Equality Tribunal ruling found that a lesbian couple, who both worked for a fast food restaurant in Cork, were forced to endure obscene remarks and queries about their relationship and sexuality from another employee at the branch.

The tribunal found that management at the restaurant failed in their duty to take the appropriate steps to protect the women and consequently were instructed to pay €15,000 to the couple.

Under Irish Employment Legislation it is the duty of the employer to provide a workplace that is safe for lesbian women and gay men to be open about their sexuality.

This is something that all employers need to pay close attention to - this kind of sum could sink a small company - we heard yesterday that Ireland's economy is receding again - We know the whole area can seem like a minefield but companies simply can't afford to be careless when it comes to employee related matters. It is crucial to keep on top of the regular updates in Legislation.

Did yo know that parental leave has recently been increased from 14 to 18 weeks?

Did you know that Maternity, Adoptive and Health and Safety Benefits are taxable as of 1st July 2013?

The National Employment Rights Authority (NERA) is carrying out inspections in Irish workplaces and imposing fines where employers are in breach of Irish Employment regulations.

The employer is legally required to have contracts of employment in place with all employee who have accrued 2 months' service - employers also need to have employee handbooks in place.

Without employment documentation and clear and appropriate policies and procedures in place the company is not insulated against the risk of a fine - many employers are exposed at the minute and need some guidance to ensure they are protected in the future.

We are Irish Employment Legislation specialists and are offering complimentary consultations/audits to employers in Ireland who feel that they would benefit from a meeting with one of our HR specialists.

Do not hesitate to leave us your details and we will be in touch shortly to arrange a complimentary (no-strings-attached) audit of your documentation or just a general consultation that will hopefully help your understanding of employer responsibilities.

As you are probably aware three crèches between Dublin and Wicklow have come under intense scrutiny in recent days after it came to light that young children under their care were allegedly subjected to inappropriate and unacceptable treatment by staff at the childcare and early learning facilities in Stepaside, Malahide and Rathnew.

An RTÉ researcher, posing as a childcare worker, uncovered the substandard care while working at the facilities. The undercover researcher’s disturbing findings included video footage illustrating manhandling of infants and young children. The report, “A Breach of Trust”, was aired on Prime Time Investigates yesterday (Tuesday 28^th May 2013). The claims are currently being investigated by An Garda Síochána and the Childcare and Family Services unit of the HSE.

While the Prime Time Investigates programme focused heavily on three specific facilities it also highlighted failures in the entire childcare industry in Ireland. The researchers acquired a HSE inspection report that showed that a staggering 75% of Irish childcare facilities were in breach of regulations in 2012.

Minister for Children, Frances Fitzgerald, said that the HSE inspection reports into childcare facilities will be published online in the next few weeks.

Understandably, these statistics have caused uproar and have opened up a huge debate on childcare standards in Ireland. Many parents have been very upset by the recent revelations of breaches in child protection regulations. The poor practices exposed in certain crèches are likely to negatively affect the opinion held by many with regard to childcare facilities in Ireland.

These revelations will bring about intense scrutiny from parents of children in crèches all around the country. In order to protect their reputation it is absolutely vital that management take the time to ensure that all employees in crèches and childcare facilities in general are fully qualified for the roles in which they have been hired.

It is imperative that all employees working with children are vetted thoroughly and that all relevant paperwork is in place.

 

The HSE report from 2012 highlighted serious policy breaches and failures on numerous grounds like the child-carer ratio. It is imperative that employers seek advice from Employment Legislation experts if they need clarification on policies and procedures that they are required to have in place or if they need help in determining whether or not they have the appropriate paperwork on file. It is essential that all facilities are adequately staffed and that management take the necessary precautions to ensure a high standard of protection and care for children at all times.

One suggestion perhaps might be to install a CCTV system to monitor the interaction between employees and children – before doing so, however, a CCTV policy is required – again, it is essential to seek advice from the appropriate body if you are considering such a course of action.

Reports suggest that multiple employees have been suspended and that at least one employee has been dismissed by the crèches named in the report pending the conclusion of the Garda, HSE and internal inquiries.

Employers need to remember that, to avoid any risk of exposure, it is absolutely imperative to follow approved disciplinary procedures prior to disciplining employees. Regardless of the severity of the situation there are steps that need to be followed in order to ensure employers remain compliant with all Irish Employment Legislation. It is vital to follow procedures that are in line with the Labour Court recommendations to insulate your company against the risk of a future claim or fine. To avoid jeopardising the process contact an Employment Law expert prior to initiating any disciplinary action and arm yourself with the appropriate guidance.

 

 

Employee who was dismissed while on sick leave (for allegedly failing to discharge his duties as head chef and because of his unacceptable behaviour over a number of months) is awarded a sum close to €18,000 by the Employment Appeals Tribunal under the Unfair Dismissals Acts, 1977 and 2007, the Minimum Notice and Terms of Employment Acts, 1997 to 2005 and the Organization of Working Time Act, 1997.

According to the Employer the Employee in question allegedly displayed aggressive behaviour and appeared for work under the influence of drink. Reports of bullying of colleagues and name calling were filed with the Employer along with incidents of racism and other insults (for instance, calling a kitchen porter “stupid”, “slow” and “a druggie”). The Employee was also accused of throwing a knife at another member of staff - Matters the Employee refutes.

 

The Employee’s performance was called into question on a number of occasions prior to his dismissal – his failure to have adequate staffing and stock were criticized. A lack of communication and flexibility, in particular in relation to changing his time-off (for example, refusing to come to work on Good Friday when the Munster rugby team was playing) was outlined in an “Official Written Warning” on the 6^th of April (the second letter of its kind).

On the 7^th of April a dispute arose as to whether the Employee in question arrived for work “drunk”. He was instructed to get a blood test by his Employer. The Employee left the premises and sent a text message explaining that he would be on sick leave for the remainder of the week. Over the next few weeks the Employee sent numerous medical certificates indicating that he was suffering from an ulcer (the Employer was aware of this ulcer from early on in the employment).

On receipt of the “Official Written Warning” dated 6^th April (mentioned above) the Employee’s trade union sought a meeting with the Employer as the trade union maintained that the warnings had been issued “unfairly without any consultation or trade union representation”. This meeting was held on the 20^th of April in the hopes that issues between the Employer and Employee (who had previously been friends) could be resolved, however, the Employee’s unresponsiveness dissatisfied the Employer and he undertook to consult with his legal team. The Employee believed that the Employer wanted to replace him as he had advertised for a head chef the previous day (April 19^th).

On the 26^th of April the Employee enquired as to when he should return to work and the Employer replied telling the Employee to start back the following week (May 3^rd) but when the expected return date arrived the Employee again produced a medical certificate. Two days later the Employer instructed the Employee to post medical certificates and not to attend the premises, except to return keys, until the Employer had heard from his legal team.

When the Employee furnished medical certificates to cover him for the entire month the Employer wrote to the Employee dismissing him for failure to heed the warnings regarding his behaviour and for arriving to work under the influence of drink as well as throwing a knife at another staff member. 

The Employee believed the disciplinary action was taken against him as a result of a complaint that he had made to the National Employment Rights Authority (NERA) a few months prior to the dismissal.

The Employee was dismissed while on sick leave and the Employment Appeals Tribunal found that, based on the medical certificates and an endoscopist’s letter, the Employee had genuine reason for his absence. The Tribunal found that the procedures used by the Employer in dismissing the Employee were “flawed” and “deficient” because neither of the “official warnings” issued to the Employee put him on notice that his job was in jeopardy.

The Tribunal found that the Employer had not investigated the knife allegation in a “fair” manner. The Employee was dismissed without the benefit of a disciplinary hearing and without being afforded the opportunity to respond to the allegations made against him. In addition the Tribunal found that the Employee was not afforded an adequate opportunity to improve between his warning letter and his dismissal (as he was on sick leave during that period).

The Employee was awarded €14,500 under the Unfair Dismissals Acts, 1977 to 2007, €1,538 (being the equivalent to two weeks’ pay) under the Minimum Notice and Terms of Employment Acts, 1973 to 2005 and €1,691.80 (being the equivalent of 11 days annual leave) under the Organisation of Working Time Act, 1997.

In total the sum awarded to the Employee by the Tribunal was €17,729.80.

You might ask how this Employee received such a substantial award given his alleged appalling performance in the workplace...... The Employer failed to follow the correct process when disciplining, and then dismissing, the Employee and therefore left himself open to a claim under the Acts.

This was a very costly mistake on the part of the Employer and one that could easily finish a small business.

This example, along with thousands more, reiterates the significance of complying with Irish Employment Legislation and observing appropriate disciplinary procedures in order to insulate your company from the risk of a claim.

 

 

Published on Employment Appeals Tribunal Website – 29^th May 2013 – Sealed with the Seal of the Employment Appeals Tribunal. 

Source:

http://www.eatribunal.ie/determinationAttachments/indexedLiveDocs/c5e8f31a-cc9b-4ee6-8d59-1d9d7e1059ee.pdf

 

 

 

As most people know all too well maintaining levels of employee engagement and motivation is crucial in ensuring an efficient working environment… However, it is not always easy to achieve!

Increased motivation is linked to heightened levels of creativity and productivity in the workplace. Employee engagement is very important and treating employees in a proper manner as well as respecting human dignity is cardinal in encouraging morale and contentment in the working environment.

 

There are many factors involved in preserving employee engagement and motivation – factors such as the employee’s involvement in challenging tasks, accomplishing something that has value/meaning, personal progression and development, learning new skills like teamwork or independence and many more.

Employees are motivated to do better and work harder when they are satisfied in their roles. When they feel as though their career will benefit they will go that extra mile for their employer. Also, when an employee has job security and a basic income that satisfies their financial needs they will be motivated in the tasks/projects that they are working on.

Of course individuals will be influenced by varying issues and, therefore, motivated by different factors. However, being asked to do menial tasks day in day out - no matter who you are - is not likely to encourage a motivated employee and, in fact, is likely to promote a negative atmosphere.

Naturally, basic pay is a motivator – people obviously need to be able to cover their monthly out-goings – and if the basic salary is too low then it can actually have a de-motivating influence. However, money is far from the only thing that motivates employees to work hard... some people are more concerned with getting great work experience than being able to save for a luxury holiday or a new car. Some employees are forward-thinking and see industry-related experience as a way to develop their career. The “overall package” is examined and can be motivational as a whole with a lighter emphasis on salary alone. Similarly, a company with a glowing reputation, or a company with a great brand name or with international links, is likely to attract more interest from prospective employees irrespective of whether the basic pay is below the industry standard or not. If the job is exciting or seen as meaningful then the employee will be less concerned with basic pay. Similarly, if the role offers a bright future for the employee in the way of promotional opportunities or networking links, for instance, this will surpass basic pay in terms of motivation or pull.

Below are examples of some of the different incentives and benefits that employers should pay attention to and consider in an effort to motivate employees:

• Job location or commute is important – whether the place of work is easily accessible and the costs, time and effort etc. associated with the commute.
• Hours of work – how long the employee is supposed to spend in working mode and whether flexi-time or flexibility in location (working from home, for instance) is an option.
• The allocation of annual leave and other similar policies (payment during sick leave/ maternity leave etc.)
• Whether there is a bonus scheme in place and what that bonus might be – for instance, what target the employee has to achieve in order to be eligible for the bonus.
• Pension benefits – these days employees are very concerned with their future financial outlook especially if they cannot save much now.
• Use of a company car is a motivating factor for some as it can save the employee a great deal in terms of fuel, insurance and tax (on top of the cost of the vehicle itself!)
• Smaller incentives like parking, health insurance, on-site childcare, a canteen and accommodation are all motivating factors for employees.

Employers offer a range of benefits similar to those listed above. It is essential for employers to remember that most of the benefits discussed (which are typically provided in addition to an employee’s salary) are subject to income tax. For clarity on this employers should seek advice from the Revenue Commissioners who are responsible for the collection of such taxes on behalf of the Government.

A benefit-in-kind is a benefit that an employee receives that cannot be converted into cash (but has a cash value). A loan given at a special rate would be an example of this as would a company vehicle.

The other category of employee benefit incorporates items like vouchers, holidays, payment of an employee's bills and prizes etc.

All employees who earn in excess of €1,905 per annum must pay tax on the value of benefits and benefits-in-kind.

Taxation of benefits is dependent on the value of the benefit. For instance if an employer provides you with a holiday voucher to the value of €1,000 this is considered €1,000 in additional income for tax purposes and is taxed accordingly.

The rules applying to benefits-in-kind are slightly different – this taxation varies. Generally, the value of the benefit-in-kind is the cost to the employer of providing the benefit less any contribution made by the employee.

It should be noted that special rules apply to the following benefits-in-kind:

• A car or other motor vehicle (An employee can reduce the amount of benefit-in-kind assessed on a car if they incur a certain amount of mileage for business purposes. The benefit-in-kind can be further reduced if an employee contributes to insurance costs, motor tax and petrol).
• A loan provided by the employer (this is usually at a special rate)
• Provision of living accommodation

 

Benefits that are exempt from tax or can be received tax efficiently are inclusive of but not limited to the following items:

• Provision of bus/train passes
• Bicycle and safety equipment under the Cycle to Work Scheme
• Reimbursement of expenses necessarily incurred in the course of employment
• Lump sum and certain redundancy payments
• Working clothes
• Non-cash personal gifts not related to employment
• Employer's contribution to statutory or revenue approved pension schemes.

It is essential to check with the Revenue Commissioners if you are unsure of how to treat any benefit.

If an employer provides a benefit worth less than €250, PAYE and PRSI need not be applied to that benefit. Only one such benefit can be awarded to an employee within a tax year. Where a benefit exceeds €250 in value, the full value of the benefit will be subject to PAYE and PRSI deductions.

 

Annual leave is paid time off work that employees are granted by their employers - it can be used for whatever the employee wishes. It is important for employees to recharge the batteries and annual leave helps maintain a motivated and productive workforce. It is essential to note that the employer is statutorily obliged to provide a certain amount of annual leave to his or her employees. An employer can, of course, provide more leave than he or she is obliged to give – if an employer offers more leave to employees with long service histories or employees who exceed targets, for instance, this policy should be clearly defined and should be applied fairly across the board.  

Regardless of the employee’s status or length of their service everyone is entitled to annual leave. All time worked is eligible for paid holidays.

 

Here is an easy guide to assist employers in working out what leave should be allocated to each employee:

 

There are three methods used to work out leave entitlements:

 

a)            The most common method used is: 4 working weeks in a leave year during which the employee works a minimum of 1,365 hours (Unless the employee has changed employment during that year).

b)            1/3 of the employee’s working week per calendar month of at least 117 working hours (Eg: 1.67 * 12 = 20 days)

c)            8% (.08) of the hours worked by the employee in the leave year (the total is not to exceed 4 working weeks)

In some instances an employee’s leave could be worked out using more than one of the approaches listed above – where this is the case all applicable methods should be calculated and the employee shall be entitled to the highest result. Remember - the maximum statutory annual leave entitlement is four of his / her normal working weeks.

 

How to calculate an employee’s annual leave pay:

 

Not everyone works a 9-5 office job and not all employees earn the same gross figure on a weekly basis so here is a guide on how to determine holiday pay due to various categories of employees:

(a)            If the employee’s pay is calculated by a fixed rate or a salary then the figure due to the employee per week of paid annual leave is equivalent to the amount he or she received for the normal weekly working hours last worked - This payment includes any regular bonus or allowance (that isn’t based on work completed) - it excludes any overtime pay.

 

(b)           If the employee’s pay is not calculated by a fixed rate or salary but instead by commission, for instance (or based on productivity rates) the amount paid to this employee per week of annual leave should equal their average weekly pay calculated over the 13 weeks prior to their annual leave commencing. (If the employee did not work during that period, the average weekly pay is calculated over the 13 weeks prior to the employee’s last working day before the annual leave commences. This excludes overtime.

In order to accurately calculate the number of annual leave days an employee is entitled to it is necessary to incorporate all hours worked in the calculation including time spent on annual leave (yes, employees accrue annual leave while on annual leave!), time spent on maternity leave, parental leave, force majeure leave or adoptive leave as well as time spent on the first 13 weeks of carer’s leave. Employees do not accrue annual leave while on sick leave, occupational injury, temporary lay-off, or career break.

 

If an employee falls sick during his or her annual leave this day(s) is not counted as annual leave (once it is covered by a medical certificate) and the annual leave day is kept for them to use at a later date.

 

It is common practice for an employee to request their desired leave dates and usually, once an agreed period of advance notice is given (allowing the employer to arrange suitable cover etc.), the employer agrees. Annual leave is usually discussed in terms of weeks but, with employer consent, it can be broken down into shorter periods – often days or even half days at a time. It is the employer who approves holidays (it would not work from a business perspective if all employees were to arrange leave at the same time, for instance). The employer is, however, required to take the employee’s family responsibilities and need for rest and recreation into consideration.

 

This annual leave must be given to employees within the leave year or, with the consent of the employee, within the first six months of the following year. The onus is on the employer to ensure that the employee takes their statutory leave allocation within the appropriate period. Employees may, with the consent of the employer, carry over holidays that exceed the statutory allowance to the next year.

 

If the contract of employment is terminated and there is unused annual leave in respect of the employee the employer is obliged to compensate the employee for the accrued leave. It is illegal to pay an employee in lieu of the minimum statutory leave entitlement unless the employment relationship is terminated.