Where are employers going wrong when managing annual leave?
In light of the recent controversy that has surrounded Ryanair in regard to management of annual leave, Personnel Today have published 5 common employer pitfalls. At Employment Law Services (ELS) we have summarised these to help our existing and non-existing clients avoid being caught out.
(1) Not encouraging employees to spread annual leave out over the working year
It can become problematic for employers who allow their staff to build up too much annual leave.
This could arise in the event of excess work to complete or a business finds they are struggling due to the economic climate. Because of this, employees may be hesitant to take annual leave as they believe they are not in a position to do so at certain times of the year without putting their job at risk.
It is suggested that employers encourage their employees to plan and take time off, by doing this it helps to preserve employee health, wellbeing and motivation. Further, this helps prevent the workforce from sitting on excessive amounts of leave to take at the end of the year.
(2) Offering an employee a cash substitute for their holidays
Often an employer may be tempted to offer their employee with a cash alternative in return for them giving up their annual leave entitlement. This has been seen when organisations are having a staffing crisis, have a heavy work load or require a big project to be completed on time.
It is important that employers remember the key principle of annual leave legislation – employers cannot offer employees payment in lieu of their statutory minimum annual leave entitlement.
(3) Allowing employees to carry over excessive amounts of annual leave
European law restricts employers from carrying over the first 4 weeks of an employee’s statutory annual leave, except in the situation where an employee has not been able to take their holiday entitlement due to sickness. If they are not taken, they are lost.
After the first four weeks of statutory annual leave, employers have more scope to allow employees to carry forward any holidays left at the end of the year.
It is important that employers/managers confirm this through the employee’s contract of employment when clarifying whether this will be allowed or not and what rules have already been set.
(4) Authorising too many employees holiday requests at the one time
This is generally seen during summer time and Christmas time. Managers are often discouraged to turn down an employee’s holiday request if they have already planned the trip.
However, it is important that employers/managers remember they are not legally obliged to accept these requests, unless the contract of employment states otherwise.
At Employment Law Services (ELS), we equip our clients with clear policies on holiday requests and encourage employers/managers to decline requests if the timing would result in the business struggling.
(5) Not paying the employee the correct rates during annual leave
Recently, according to Personnel Today, “the single biggest employment law headache for UK employers has been revolved around the calculation of holiday pay.”
It is important to note, that it is no longer admissible to calculate holiday rates on the basis of an individual’s basic rate only.
Employers now need to consider over time, commission, stand by and travel allowances.
How can Employment Law Services (ELS) help?
Ensure your HR policies are updated to comply fully with current UK employment law. This is critical in protecting your business from employment Tribunal claims because they provide the framework to help employers to treat their staff fairly and consistently within the parameter of current UK employment law.
Formalising arrangements in certain areas of people management and development not only makes good business sense, it also ensure everyone is treated fairly and consistently which will help protect your business by significantly reducing the risks and costs associated with disgruntled staff filing Industrial Tribunal claims.
If you require employment law advice on any of the issues raised in this article, or any other employment issue give us a call today on 0370 218 5662. You can also find out more about our fixed fee HR packages here and fixed fee employment law packages here, or get in touch.