What to do about unused annual leave

Moira Grassick - Chief Operating Officer

November 03 2020

First published: November 3rd, 2020

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 annual leave not taken.

Here, we’ll take a look at some of your options.

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

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 discretion to decide when their employees take their annual leave.

When doing so, it’s important 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.

Carryover of annual leave in Ireland

Annual leave carryover in Ireland can be a cloudy area for both employers and staff. Especially if your employment contracts don’t set out your business’s position.

Your employees may ask can they lose annual leave or request to carry forward annual leave. This is where you need a robust policy.

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 must discuss with your employees how they can use their unused annual 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.

Need our help?

Worried about unused leave due to coronavirus? If you’re a Peninsula client, you can call our 24/7 helpline for instant, unlimited advice on how to manage unused annual leave.

Not a client? No problem.

You can still claim a free advice call with one of our HR experts today.

To speak to an expert and get the latest guidance on unused annual leave, call 0818 923 923.

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