Top tips for resetting the annual leave clock

Brian Murray

December 03 2019

The calendar year is coming to an end. Businesses everywhere are already planning for 2020. That means that many will reset their annual leave calendar come January 1st.

From a HR perspective, it’s vital that your employees receive their statutory annual leave entitlements before the end of the year.

Likewise, you should check that you’ve provided any other discretionary leave entitlements specified under your contract of employment.

Here we look at some annual leave issues that tend to come up at the turn of the year.

Have Christmas public holiday entitlements been complied with?

Most staff will enjoy some time off over Christmas. That said, it can depend on their employer’s operational requirements.

There are three public holidays over the festive period: Christmas Day, St. Stephen’s Day and New Year’s Day. Employers in industries such as retail and hospitality may need all hands on deck over Christmas.

Asking employees not to take holidays over the Christmas period isn’t unheard of. This is usually to cope with increased customer demand. If this is the case with your business, ensure you've complied with public holiday entitlement rules.

Full-time employees who work public holidays must receive a paid day off within a month of the public holiday. An additional day of annual leave or an extra day's pay will also suffice.

Providing employees with the statutory minimum of four weeks’ paid annual leave within the leave year is crucial. This is in addition to your employees’ public holiday entitlements and must be taken as leave.

It’s also illegal to replace an employee's four weeks’ statutory holiday entitlement with pay. This is unless the contract of employment is terminated during the annual leave year.

Annual leave balances and carryover

Many employers ask if employees can carry over annual leave. Look to your employment contract for the answer. It might specify that your annual leave year runs from January to December. During that time, employees could build up a lot of unused annual leave. If so, you need to inform them about how they can use their entitlements.

Some employers operate a policy that prohibits employees from carrying over annual leave into the next leave year. This is a policy you might look to enforce. If your employees haven’t taken their four-week minimum, afford them the opportunity to do so. Or, offer payment for unused discretionary annual leave entitlements before the end of the leave year.

A ‘use it or lose it’ approach to unused annual leave also exists. You can only enforce this if you can show you informed employees of their entitlements and encouraged them to take their holidays.

You might also allow employees to carry over holidays into the next annual leave year. If you do, remember to update your 2020 annual leave balances.

Need our help?

If you would like further complimentary advice on annual leave from an expert, our advisors are ready to take your call any time day or night. Call us on 1890 252 923 or request a callback here.

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