It’s coming to the end of the year and throughout the country, people are trying to get the last few loose ends tied up in anticipation of the Christmas break and the New Year.
This time of year also throws up one of the major administrative headaches that any business may encounter. Here at Peninsula, we receive a deluge of calls in December from employers who have identified employees who still have a lot of leftover annual leave to take before the end of the year.
In Ireland, it's the responsibility of the employer, not the employee, to ensure that employees have received their statutory minimum annual leave. Ultimately, if an employee has not received their minimum leave entitlement, it's the employer who may get in trouble with NERA or a tribunal body should the employee take a claim.
So what can you do if the year is coming to an end and some of your employees have not yet used all of their annual leave?
Allocate annual leave
Under the Organisation of Working Time Act, you're entitled to allocate an employee’s remaining annual leave. The Act does, however, require an employer to give the employee at least 30 days’ notice before allocating the remaining annual leave (although if the employee is agreeable then this is unlikely to be an issue).
However, while you're entitled to allocate annual leave, you can only do so provided you take “into account (i) the need for the employee to reconcile work and any family responsibilities, and (ii) the opportunities for rest and recreation available to the employee”.
Thus, do try to find out why the employee has not yet taken their leave. For instance, they may be saving it up for a reason, such as waiting for the school holidays so they can take time off with their children.
Carry over annual leave to the New Year
While strictly speaking an employee should receive their minimum annual leave within the current leave year, you may carry over some of the employee’s annual leave entitlement to the next leave year, provided the employee is agreeable.
In cases where the employer allows for the carryover of days, it's advisable to set time periods by which the leave must be taken in the next leave year. In any event, the Act requires that the annual leave must be taken within six months of the next leave year.
It's also worth bearing in mind that the employee will still be entitled to the full leave entitlement in the next year in addition to the carried over leave. So, for example, if the employee has five days of their 20 days leave entitlement leftover from 2013, they'll be entitled to 25 days in 2014.
Thus, you will need to proactively manage annual leave in the current leave year to avoid a number of employees carrying over and building up annual leave in the following year.
Buy back policy
A lot of employees receive over and above their statutory annual leave entitlement.
For example, under the Organisation of Working Time Act, an employee may be entitled to 20 days' annual leave but the employer may in fact give 25 days. Where such a scenario exists the employer may allow a policy whereby employees can ‘buy back’ their remaining annual leave entitlement provided they have taken at least their statutory annual entitlement.
In the scenario given above, as long as the employee has taken at least 20 days annual leave, the employee could ‘buy back’ as many as five annual leave days. This can prove most useful in situations where a business is particularly busy and the use of annual leave would leave you short staffed. It also allows an employee to receive additional payment around the expensive Christmas season.
Conclusion
While leftover annual leave days can be a problem, they don't have to be a headache.
By implementing one or more of the above you can effectively manage this tricky situation. The best way forward, however, would be to introduce a clear annual leave policy into an employee’s handbook in order to prevent such leftover days.
Many businesses require a certain amount of leave be taken before mid-year or require leave to be taken in spring, summer, and autumn.
Need our help?
For further complimentary advice on annual leave from an expert, call us any time day or night on 0818 923 923 or request a callback here.
