How to manage your annual leave backlog

Annual leave advice by Alan Hickey, Service and Operations Director at Peninsula

Unused annual leave is a hot topic for many employers across Ireland at the moment.

That’s because annual leave management during COVID-19 hasn’t been easy. And now, as Christmas closes in, you may wonder how to treat employees who have unused entitlements.

Here, are some of the options available to employers.

Is there actually a build-up of unused annual leave?

First things first – is there a build-up of unused annual leave? Given the limited travel options this year, it’s highly likely that your staff may have unused annual leave.

Don’t forget however that if you’ve had to lay staff off temporarily, those employees don’t accrue annual leave while they’re not working.

However, an employee may have completed 1,365 hours of work during the leave year, even if they were laid off. If that’s the case, they’re still entitled to four weeks’ paid annual leave.

Use the Organisation of Working Time Act 1997

The Organisation of Working Time Act 1997 entitles all employees to 20 days’ paid annual leave during any given leave year.

Under Section 20 of the Act, employers have the discretion to decide when their employees take their annual leave.

When doing so, it’s crucial to account for your business requirements and consider:

· The need for the employee to reconcile work and any family responsibilities.

· The opportunities for rest and recreation available to the employee.

If you’re relying on Section 20 to get employees to take their annual leave, consult with them at least one month before they take it.

Balances and carryover

Annual leave carryover can be a grey area for both employers and staff if your employment contracts don’t set out your business’s position. For instance, the contract might specify that your annual leave year runs from January to December. During your annual leave year (and especially this year) unused annual leave can build up. If this has happened, you’ll need to discuss with your employees how they can use their unused leave entitlements.

You may operate a policy that prohibits employees from carrying annual leave into the next leave year. If so, you need to ensure your staff receive their full four weeks of paid annual leave before the end of 2020.

Of course, you may be an employer who allows employees to carry unused annual leave into the next year. If you do, don’t forget to update your 2021 annual leave balances and make sure the unused leave from 2020 is taken in the first six months of next year.