• James Fatherley

Are you facing Annual Leave Backlogs?

Travel companies have been seeing an uplift in people booking foreign travel in 2022 due to the availability of vaccines in the UK and with the renewed popularity of UK holiday destinations, many people are likely to book holidays for 2022. And if they have carried over annual leave entitlement from 2020 to 2021 – as they are now entitled to do - many small businesses could be facing the challenge of managing annual leave backlogs and bottlenecks.

People may be planning extended breaks or thinking about taking holidays at the same time as their colleagues. For employers this presents practical and operational challenges alongside the need to treat their employees fairly and legally.

If employers honour too many leave requests, it could lead to operational failure at a time when so many businesses are already struggling because of the pandemic. Although it’s important that an employer manages annual leave fairly, they also need to balance this with a pragmatic approach that mitigates risk to their business.

What are the revised holiday carry-over rules?

Holiday carry over is simply the idea that employees carry forward remaining days from their annual leave entitlement from one year to the next.

In March 2020, the government announced changes to existing rules regarding holiday carry-over. These enable employees for whom taking holiday was ‘not reasonably practicable’ during the pandemic to carry-over up to four weeks over the next two consecutive leave years.

The relaxation of the existing rules – which date back to the 1998 Working Time Regulations (WTR) – was intended to provide businesses affected by COVID-19 with the flexibility to better manage their workforce, while protecting employees’ rights to paid holiday.

The WTR originally gave workers 5.6 weeks of annual leave in each leave year. It specifies that 4 weeks of this leave must be taken in the leave year to which it relates, and the remaining 1.6 weeks can only be carried over by agreement with the employer for one leave year. There are some exceptions to this, including where workers cannot take annual leave due to sickness or maternity leave.

Although many of the WTR rules still apply, the government’s amended regulations regarding holiday carry over is an important update and one that applies to businesses of every size.

Six tips for employers

1. To avoid a backlog of annual leave requests at the end of your company’s holiday year or at peak times when you most need your employees to be working, actively communicate with your people and encourage them to take time off when they can.

2. Regularly check your records to key an eye on team and individual holiday allowances to make sure people are using their holiday entitlement. Encourage managers to speak to their team members about the importance of taking time off.

3. Make sure your annual leave policy is crystal-clear, up to date in terms of recent legislative changes and easily accessible to all people. Using dedicated document management & communication in HR management software such as Breathe HR can make this very easy to achieve.

4. Think carefully about the mental wellbeing of your people. Well-rested staff perform best. Try and avoid burnout amongst your staff members.

5. Don’t forget your staff who are or have been on furlough leave during the COVID pandemic. They will continue to accrue annual leave entitlement throughout their furlough. You could have asked staff who were on furlough to use up some of their holiday entitlement during their furlough leave, if you top up their pay to 100% of their normal salary for the period they are on annual leave, did you know this, and did you exercise this?

6. Lead by example. Small business owners are notoriously bad at taking time off and booking annual leave. So much so, that studies have showed 1 in 5 don’t take any time off at all. You owe a care of duty as much to yourself as your employees and it also encourages them to take time off.

Can I force employees to take holiday?

Technically, yes, but it might not be advisable from an employee relations or engagement perspective.

Employers can require employees to take holiday on specific dates by giving notice which is double the length of the holiday required to be taken. (For example, if the employer requires the employee to take one week's annual leave, it must give them at least two weeks' advance notice.)

Employers can also cancel staff’s annual leave, if necessary, by giving notice which is the length of the planned holiday; however, they should do so only, when necessary, as exercising this power unreasonably could lead to staff unrest or constructive unfair dismissal claims which needs to be avoided at all costs.

2022 & Beyond

To help plan your annual holiday more efficiently it would be prudent to use a HR System to manage usage in future years, speak to the team at Digital HR Northeast to understand how Breathe HR can help you moving forwards.

Always remember two things which can annoy & alienate your employees are incorrectly calculating Pay & Holidays.

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