The Holidays are coming – By Eluned Ward
As year is drawing to a close, and many people are coming to end of their annual leave year, we thought we would give you the gift of ten top tips to managing annual leave and holidays in preparation for next year.
- Causal Staff
A common myth is that casual staff do not accrue annual leave, when in fact all workers are entitled to holidays under the Working Time Regulations.
Causal staff who have no definite hours in their contracts are entitled to holiday leave based on the number of hours they worked. One of the ways you can work out holidays for casual staff is based on the figure of 12.07%. The 12.07 per cent figure is 5.6 weeks’ holiday, divided by 46.4 weeks (being 52 weeks – 5.6 weeks). The 5.6 weeks are excluded from the calculation as the worker would not be at work during those 5.6 weeks in order to accrue annual leave.
So if someone works 10 hours, they are entitled to 72.6 minutes paid holiday (12.07/100 x 10 = 1.21 hours= 72.63 minutes).
- Keeping records
Accurate records are vital in order to maintain how holidays are managed fairly. By having a system it can stop confusion of when people have requested and taken annual leave, as well as monitoring how much leave has been taken. Whilst some companies rely on a paperbased system, there are more and more people moving to online systems, such as OneHR. The advantage of using an online system are many including employees being able to access their own records and seeing when other members of the team are off which will help stop too many requests for time off at the same time. The online systems means managers can see when requests are made, approve and deny holidays requests even when they are not in the office.
- Busy Periods
Summer holidays and end of year leave attract high levels of leave requests and very often there is an expectation these times should be reserved for employees with childcare responsibilities. Therefore it is best to have a clear annual leave policy which tells employees how much notice they have to give to request holidays and whether the company operates a first come first served policy. As an employer, you do not have to accept all leave requests and can specify when leave can be taken within employment contracts. If you choose to reject a leave request due to business needs, you must supply a written counter notice to the request prior within the timescale based on the length of the leave request. For example if the leave request is for a one week, you must inform the employee of the decision one week before the start date of the leave request.
- Part time staff and bank holidays
The majority of the time bank holidays fall on a Monday and this can impact on part timers and their holiday entitlement. It may seem unfair if bank holidays always fall on a person’s non-working day or if it always seem that a part timer always has the bank holidays off. A part timer’s holiday entitlement should be based on a prorated entitlement of 5.6 weeks (28 days). This means that if a part time employee works 2.5 days, they would receive 14 days. If their working pattern was Monday to Wednesday, they would use 5 days of that entitlement to cover the banks holidays. If their working pattern was Wednesday to Friday, they would use 3 days of their entitlement to cover bank holidays. Whilst some of your employees may claim that this is unfair, you just have to ensure that part time employee receives the equivalent of the statutory 5.6 weeks based on their working pattern.
- Annual leave year and Bank Holidays
The statutory holiday entitlement to holidays is 5.6 weeks and the majority of companies will count bank holidays as part of this entitlement. This is fine if your annual leave year runs from January to December but difficulties may arise if your leave year runs between different months of the year. For example if your leave runs April to March in 2015/2016 there are ten bank holidays and for the period 2016/2017 there are only six bank holidays. This could mean that employees only receive 26 days during the annual leave year 2016/2017 which is below the statutory entitlement. If you provide enhance annual leave it is not such an issue but if you only provide statutory entitlement you need to consider how to manage the situation. One solution is that your contracts just state the employee is entitled to 28 days holidays, which may include bank holidays This would allow for you to say to the staff during a holiday period where 10 bank holidays fall, i.e. 2015/2016, they are only allowed to take 18 days at any time during the year plus the 10 bank holidays. In the case of the holiday year where only 6 bank holidays fall 2016/17, they can take 22 days at any time during the year plus the 6 bank holidays. This way they would still get the statutory 28 days holiday no matter when the bank holidays fall. You would just have to make it clear at the beginning of the holiday leave year what they are entitled to.
- Employees booking holidays, including flights and hotels before leave has been approved
As manager you can be presented with the situation of when somebody has booked their flights and accommodation before submitting a leave request. You can refuse an annual leave request particularly if it is going to have a significant impact on the business, although you would have to let them take it at a later date. Any refusals must be confirmed in writing and if the employee states they are going anyway you would just have to treat them as AWOL if they don’t turn up. To avoid this situation you should make it very clear when somebody starts with you the process for booking annual leave and have it clearly outlined in your policy.
- What happens if an employee decreases/increases their hours during their holiday leave year
If an employee decreases or increase their working hours during the annual leave year, it will affect their holiday entitlement. You cannot based their holiday entitlement on the previous working pattern for the full year. You will need to complete to calculations for holidays for each period of time based on their working pattern. For example, if half way through the year somebody decreases their number of working days to 22.5 days, for the first part of the year they would be entitled to 14 days (28 divided by 12 times by 6) and then for the rest of the year they would be entitled to 7 days (28 divided by 5 times by 2.5 divided by 12 times by 6), which gives them 21 days for the whole year.
- Carrying over holidays
An employee must take the minimum of 20 days leave during any one annual leave period in order to comply with legislation. If your employee does not manage to take any holidays they receive about this amount during the leave period there is no obligation to allow the employee to carry these over. You need to be clear to an employee whether they can carry holidays over and we would always encourage companies to make sure employees to take their full entitlement to for rest and recuperation. It’s also important to note that you cannot pay in lieu of holidays for any of the 5.6 weeks unless the person is leaving your employment.
- Absence and holidays
If you employee becomes sick whilst they are on holiday, they do have the right to request to take the leave as sickness absence and to take their holiday at a later date. As a company you can ask that the employee contacts you as soon as possible to let you know they are sick and ask them to provide a medical certificate for the days they were sick regardless of whether it was less than 7 days.
If you have an employee that is off long term sick, they still accrue holiday leave during the period of sickness. If they are off sick at the end of an annual leave year and haven’t taken all or any of their holiday entitlement they are allowed to carry them over regardless of what is written in your annual leave policy. The good news is where in the past if you have somebody off sick for 3 years they would accrue holidays for the entire period however in the recent employment tribunal case of Plumb v Duncan Print Group Limited the judges limited the time somebody can accrue holidays for is for a period of only 18 months.
- Holiday and overtime
There has been several high profile employment tribunal cases around holiday pay and overtime payments and if you regularly pay your employees overtime, regardless if it is not guaranteed, you may need to factor this into the calculation for holiday pay. The good news is that this only for the first 4 weeks of any holiday entitlement and any claims can only go back 2 years, instead of the normal 6 years when it relates to underpayments.
High Performance Consultancy like to be the kind of people to give gifts that keep on giving so if you have any queries around holidays after reading the top ten tips, please don’t hesitate to contact us.