Responsibility for managing employee annual leave usually falls to the line manager and is an area that can cause serious problems for the organisation if it isn’t carried out correctly.
In the UK, legislation defines that an employee is entitled to 5.6 weeks annual leave per year and it is up to the line manager to ensure that they take this leave.
Aside from the legal aspects of not allowing employees to take their full leave, there can also be a detrimental effect on the health and wellbeing of the workforce if they work continually without a break.
In some industries, contracts of employment may exclude employees from taking their leave during certain peak periods, for example over Christmas in the retail sector, in other organisations long-serving employees can often buy additional leave. Both scenarios can create a bigger annual leave headache if not managed correctly.
It’s worth getting into the practice of regularly reviewing how much annual leave each of your down line has remaining. It could, perhaps, be included as part of their monthly review. Having this discussion will not only give you the opportunity to encourage employees to book their leave but also alert you to any potential barriers to staff taking holiday within your department.
Stand firm when you need to decline holiday requests, allowing too many staff to have holidays at the same time can cause problems. If you have a clear set of guidelines about booking annual leave, such as how much notice an employee needs to give and that it’s a first come first served system then stick to it. In the long run, this will not only help you to manage your team’s leave efficiently but also demonstrate that you are being fair to all employees.
If there is a backlog of annual leave, it can be tempting for an employer to pay staff instead, effectively buying the holiday back, or to carry them forward into the following year.
You should be clear that it is against the law to buy any of an employee’s statutory 5.6 weeks annual leave unless they are leaving the company.
If you want to carry holiday forward then you can, in some instances, but you must make sure that staff have had at least four weeks of their annual leave in the current year.
If you do allow some holiday to be carried forward then try to ensure it’s taken as soon as possible within the next holiday period, allowing it to build up again will only create the same problems in the future.
In addition to the logistics of managing annual leave on a day to day basis, employers should also be certain that they’re paying the correct rates for holiday pay.
Historically holiday pay was calculated on average basic pay over a period of time. This is no longer the case and employers should include additional payments, such as shift allowances and commissions, within the calculation.
In short, review the amount of outstanding annual leave on a regular basis to prevent a backlog; actively encourage staff to take their leave across the year; have a clear booking policy; and ensure you are making the correct payments when leave is taken.
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