- Posted Tuesday March 24, 2015
Annual leave is often, and understandably, a priority to employees. Despite this, it can often become a ‘bottom of the pile’ administrative task to managers - mainly due to its non-urgent nature.
However, people hold annual leave to such importance that any delays or mismanagement can actually impact your relationship with the employee, and therefore have a real impact on the performance and retention of key members of the team.
Annual leave entitlements and requests are also one of the most common grievance subjects, so managing them correctly can save a lot of time and effort.
Some common issues associated with annual leave include:
- Staff failing to use annual leave/requesting to carry over entitlements
- Sickness during annual leave
- Annual leaving during sickness
- Maternity/Paternity/Shared Parental Leave and annual leave
- Part time workers or new starters
- Bank holidays
The main piece of legislation that governs annual leave is the Working Time Regulations (WTR) 1998 (later updated by the EU Working Time Directive) which provides minimum and maximum restrictions on areas such as working hours, breaks and annual leave. The purpose of the legislation is to protect the health (and rights) of employees.
Under the WTR/D, workers are entitled to 5.6 weeks holiday per year. The regulations do not provide much detail to assist employers and therefore further legal precedence has been set by case law.
‘Use it, or lose it!’
The WTR says annual leave ‘may only be taken in the leave year in respect of which it is due’. The regulations also state that it may not be replaced by payment in lieu - except where the worker’s employment is terminated.
You do not have to carry outstanding annual leave over, although to reduce the risk of breaching someone’s WTR annual leave rights you should consider the following:
- Do you have a clear holiday request procedure?
If not, the FPM policies and procedures library has a holiday policy you can use.
- Are employees aware of the policy - if you have one?
- Has the employee had sufficient opportunity to request annual leave?
- Have all requests been declined?
- Have alternatives been offered?
- Do you remind employees to book annual leave?
Dealing with annual leave is not always so simple though. The following offers advice on some common complaints and questions you may face as a practice manager...
‘I was sick though!’
Although not stated in WTR, case law has established that sickness ‘trumps’ annual leave and therefore the following applies:
- Workers who become ill during or before holidays can reclaim the annual leave entitlement. You may want to include in your contracts/policies that if an employee wishes to do so, a medical certificate will be required.
- Workers continue to accrue annual leave during sickness absence
- If on sick leave, a worker can choose to take paid annual leave - it would be recommended to get the request in writing in order to evidence the request.
- Workers who are unable to take annual leave can carry over entitlements (over holiday years). Case law has so far not allowed more than 15 months to be carried over. The employee does not have to request the leave to be carried forward and should be included if dismissed during absence.
‘I’m pregnant, when can I take my leave?’
During maternity leave, a worker continues to accrue annual leave. If there is outstanding annual leave it should be carried over to the next annual leave year (if the maternity spans two years). With the introduction of Shared Parental Leave, the same will apply to both parents.
However, agreeing when to use the annual leave should follow the normal process - although many employers and employees look at using any entitlement up before the maternity leave begins or using some following the maternity leave.
‘How do bank holidays affect my allowance?’
There is no legal right to receive paid leave on a bank holiday. The 5.6 weeks statutory minimum annual leave includes bank holiday allowance.
Traditionally people would be given 4 weeks leave and not expected to work on bank holidays, therefore bank holidays are often seen to be a protected day with additional rights (4 weeks + 8 days would equal 5.6 weeks) even though this is not the case.
If you were to add a bank holiday entitlement as a separate allowance, part time workers would receive proportionately more annual leave. On the other hand, only giving part time workers the bank holidays that happen to fall on the day they usually work means that part time workers who do not work Mondays receive proportionately fewer holidays than their full time colleagues. Any practice which disadvantages part time workers risks being in breach of the Part Time Workers (PTW) Regulations.
Where bank holidays are paid in addition to the annual holiday entitlement, it is best practice to add up all the bank holidays over a year and then pro rata that on the basis of the part time workers’ hours. Add the pro rata bank holidays to the part time worker’s annual holiday entitlement to calculate the total amount of holiday entitlement. If the part time workers’ annual holiday entitlement is only the minimum 28 days under the WTR (i.e. it includes bank holidays) then their pro rata annual holiday entitlement will not change. For example a part time worker working a three day week is entitled to 16.8 days including bank holidays. Therefore, they can use their entitlement to book time off work in the usual way and as full time workers do (and those who work Mondays should book off any bank holidays falling on a Monday if the Practice is closed).
You can request an employee to work on a bank holiday unless it states otherwise in the contract although consideration should be taken to ‘implied’ terms of a contact. Implied terms are where a custom and practice builds up a contractual right over time. Implied terms have the same legal protection as written expressed terms.
‘I work three days a week, how many holidays do I have?’
Part time workers are entitled to the same amount of leave as full time (in weeks). However, if your entitlement is normally calculated in days then you will need to pro rata any entitlements.
The easiest way to do this is to time the number of days worked per weeks by the 5.6.
- 5 days per week = 28 days
- 4 days per week = 22.4 days
- 3 days per week = 16.8 days
If you have different annual leave allowances (e.g. for length of service) then you may want to pro rata in the following ways to make the process simpler:
(Employee’s weekly working hours / Employer’s Full Time weekly working hours) X annual leave allowance (days or hours)
Employee work’s 15 hours per week, full time employees work 37.5 hours per week and employees get 28 days.
Full time holiday entitlements in hours are 28 X an average working day (7.5) = 210 hours.
(15/37.5)X 210 = 84 hours.
‘I started part way through the annual leave year, what’s my entitlement?’
The WTRs state that where a worker begins employment after the leave year begins, they are entitled to the proportion of the leave year remaining. If the calculation results in a fraction of a day e.g. 16.8 days, this should be rounded up to full days (17) under WTR.
Employers calculate this differently, but an easy method to use is this example calculation:
(Amount of months remaining in the annual leave year (rounded up to the nearest half) / month in a year (12)) X normal year’s holiday entitlement
E.g. if you annual leave year runs from Jan-December, your standard holiday entitlement is 28 days and an employee starts on 18th April:
(8.5 (months remaining)/12) = 0.71
0.71 x 28 = 19.8 days annual leave (20 days)
‘I work different hours on different days, this isn’t fair!’
Where you have employees who work different hours on different days or compressed hours, calculating their entitlement in days can be disproportionate and therefore it is often better to calculate in hours.
The Government have created an annual leave calculator to assist employers with working out entitlements (remember this is for the statutory minimum and your contract may be more generous)
To convert your allowances into hours, simply multiply a normal working day’s hours (normally 7.5 hours) by the number of days entitlement (minimum 28 inc bank holidays). Pro rata (if part time) and then deduct the amount of hours that would be worked on any day taken as leave.
‘You can’t tell me when I take my holiday!’
Under the WTR workers can request any working day as annual leave although this does not mean it has to be accepted. There is no requirement under the regulations to have a reason to decline the annual leave but it is always best to give one or document one to avoid claims of unfair treatment and potential grievances.
Employers can also state when a worker is to take all or any of their annual leave at a particular time.
Both employee requests and employer chosen dates are subject to a notice period of twice the length of the leave requested/to be taken. E.g. if a holidays request is for a week, it should be submitted two weeks before it is to start.
The law does not limit the amount of annual leave an employee can take at one time although employers may not be able to accommodate long periods of leave.
For specific queries regarding annual leave FPM Members can contact email@example.com where you question will be treated in confidence and will normally be answered (by email) within 2 working days of submission.
Alternatively, there is also further information on annual leave, including template annual leave policies, calculators and holiday forms in the FPM Policies and Procedures library.
© First Practice Management, 2015. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited.