Unused annual leave is a topical issue for many employers across Ireland at the moment. That’s because annual leave management during the Covid-19 has been difficult.
Many employers are now wondering what the best way is to treat employees who have high volumes of annual leave accrued. Businesses are naturally keen to have employees avail of their entitlement to accrued annual leave so that once the Covid-19 crisis ends, they can mobilise their workforce and meet increased demand without having to deal with a large volume of annual leave requests.
Employers should check if there is a build-up of unused annual leave entitlements. Given the limited travel options in the past 12 months, it’s highly likely that your employees may have unused annual leave. Who wants to take annual leave when you can’t go abroad, or even go for a short break in Ireland? While employees who were laid off temporarily don’t accrue annual leave while they’re not working, many other employees have been working through the pandemic and have built up considerable annual leave balances.
One option available to employers to deal with this issue is to use the Organisation of Working Time Act 1997. This Act entitles all employees to 20 days’ paid annual leave during any given leave year. Under Section 20 (1) of the Act, employers have the discretion to decide when their employees take their annual leave. When doing this, your business needs to account for its requirements. It is strongly advised that any businesses relying on Section 20 (1) to get employees to take their annual leave should consult with their employees at least one month in advance of the annual leave being taken. The employer needs to take into account the need for the employee to reconcile work and any family responsibilities.
Annual leave carryover in Ireland can be a grey area for both employers and employees, especially if the contracts of employment don’t outline your business’s position. In my experience, most employers allow their employees to carry a maximum of 5 days forward from one year to the next. This annual leave carried forward usually has to be taken within the first 3 months of the new year. This is where you need a robust annual leave/time off policy. Without it, your employees may be concerned they will lose annual leave. They may expect to be paid in lieu of annual leave or may request to carry forward large amounts of annual leave days.