We are often asked about annual leave issues, here, we answer some of the most common questions about employee holidays and leave.
Q1. I have an employee who is off on long-term sick leave, are they able to carry over their unused annual leave to the next annual leave year?
Yes, employees on long-term sick leave can usually carry over unused annual leave to the next year. In most cases, employers allow up to 18 months from the end of the leave year for this carry over.
Q2. I have a number of employees who at the end of each annual leave period have not used all of their holiday entitlement. Do I have to remind them that they should take this time off or will it lapse?
Employers must give employees a real chance to take their annual leave, you should remind staff to use any outstanding leave before the end of the leave year, or risk losing it.
Employers should not discourage staff from taking annual leave or make it harder for them to use their entitlement.
Take active steps to encourage staff to use their annual leave, remind them in writing before the end of the leave year. Make sure your 'use it or lose it' policy and booking procedures are clear and well-communicated.
Q3. I have an employee who has been off on sick leave for 8 months. They have accrued a large amount of annual leave and have asked me if I can make a lump sum payment to them in lieu of the holiday. Can I make this payment?
Payments in lieu of annual leave are not allowed to be made during employment. Statutory holiday entitlement cannot be replaced by a payment in lieu, other than in circumstances where an employee’s employment is terminated (Regulation 13 (9) WTR).
Therefore, it would be a breach of this legislation to pay the employee rather than allow them to take their annual leave.
Alternatively, the employee can choose to take annual leave while on sick leave and be paid for it. This is usually only helpful if they are not receiving sick pay.
Q4. I want to reward employees with long service with additional days of annual leave but I am concerned that this may indirectly discriminate against younger employees who do not have an established length of service and so will not be entitled to the same benefit.
“Can I do this?”
Having an arrangement where an employee’s annual leave entitlement increases with length of service. These arrangements are usually set out in contracts and often start after five years.
However, there is a risk of indirect age discrimination. The Equality Act 2010. Therefore, an employer must not (without justification) discriminate (directly or indirectly) against an employee because of age in respect of their terms of employment or by subjecting them to any other detriment.
Indirect discrimination could arise if an employer increases annual leave for longer-serving employees. If an employee’s contract provides that annual leave will increase after ten years’ service, for example, this may be indirectly discriminatory because younger employees are much less likely than older employees to have ten years’ service.
The longer the service required, the greater the likelihood that younger employees will be at a disadvantage.
Schedule 9, Paragraph 10 of the Equality Act 2010 contains an exception to address this very issue, allowing employers to reward length of service, even if it disadvantages younger employees.
This exception enables employers to treat employees differently in awarding benefits if the difference in treatment is based on the fact that the disadvantaged employee has less than 5 years of service.
In respect of employees who have more than five years of service and are put at a disadvantage by the service requirement, then an employer has to show that it ‘reasonably appears’ to it that imposing the length of service requirement ‘fulfils a business need.’
In these circumstances, the requirements for objectively justifying such a practice are less onerous than in most other cases of indirect discrimination.
Q5. If an employee suffers a bereavement, do I have to give them time off work or can I make them take some bereavement leave from their annual leave entitlement?
At present, there is no right to take paid time off due to a bereavement.
However, there are exceptions for parents suffering from child bereavement.
Most employers have a compassionate leave policy for bereavement. If an employee needs more time off than your policy allows, consider each case individually. Grief affects people differently and can have long-term effects.
Mental health issues like depression or PTSD may count as a disability. Support your employee where you can, for example by offering flexible working or a phased return.
From 6 April 2020, however, this has changed in some cases with the introduction of the Parental Bereavement Pay (General) Regulations 2020.
This means that an employee who loses a child under the age of 18 or suffers a stillbirth after 24 weeks of pregnancy will be entitled to two weeks of statutory leave to be taken in one block or as two separate blocks of a week.
The leave will be paid to employees who have at least 26 weeks of service and meet the minimum earnings criteria.
Statutory parental bereavement pay will be paid at the same rate as statutory paternity pay (£151.20 from April 2020) or 90% of weekly earnings if lower.
Q6. I have received a request for annual leave from an employee during my company’s busiest time of the year. I would therefore normally refuse such a request. However, their request concerns the employee’s need to observe a religious festival. What should I do?
There is no legal requirement for an employee to give a reason for taking a holiday.
However, if they do state that the reason they wish to take their annual leave relates to religion and belief, and permission is refused, then, as an employer, you must be able to justify your decision by reference to reasons unrelated to the employer’s religion or belief.
In other words, any refusal must be a proportionate means of achieving a legitimate aim. Discrimination (either direct or indirect) and harassment in the workplace because of religion or belief are unlawful under the Equality Act 2010.
Having a clear policy in place in respect of the timings of holidays and the processing of holiday requests will assist you in these situations.
Contact Orwins Today
If you are unsure how annual leave rules affect your business, contact Orwins today to speak to an employment law specialist.
