Legislation: Avoid holiday headaches

Jo Eccles business advisor for Forum of Private Business

How to effectively manage staff holidays

Expert: Joanne Eccles

Company: Forum of Private Business Background

Background: Business advisor

 

Many businesses do have a structure that ensures adequate cover in the summer holiday season, but some can struggle due to the lack of staff and the money to provide cover if needs be, says Jo Eccles, business advisor at the Forum of Private Business. So it is important that small business owners manage staff holidays effectively to ensure the business isn’t affected by absences.

Make sure you are up to speed on holiday entitlements. 

It’s important you are up to speed with holiday entitlements. All full-time employees have a statutory right to 28 days (5.6 weeks) annual leave. Part-time workers are entitled to the same level of holiday pro rata based on the number of hours they work. However this is the legal minimum and you can choose to give more than the legal minimum (for example some employers allow workers to accrue additional leave entitlement based on years of service, or to build up extra hours as time off in lieu in place of paid overtime.

By law, your employees cannot demand specific dates for their holiday, and you do have the right to refuse an employee’s leave request if the period they are asking for doesn’t suit your businesses requirements. In addition, you can ask members of staff to take their annual leave due to predicted quiet periods, seasonal office closures, or any other reason that suits the business and they cannot refuse to take their leave in these cases.

Be clear on rules around holiday pay, sickness and bank holidays

In terms of holiday pay, employees start building up their paid leave entitlement as soon as they start work and this is not subject to a minimum period of employment. As with holiday entitlement, part-time workers pay should be calculated pro rata based on the number of hours they work. If necessary you should also make sure that you are up to speed with the different ways in which pay needs to be calculated for people working variable hours or shift workers.

Also it is worth noting that a recent EU ruling means that full-time and part-time workers that are usually paid commission should be paid this while on leave as part of their holiday pay. This applies where a worker’s pay is made up of a fixed salary and a regular variable amount that is ‘intrinsically linked’ to their role, such as a sales-related commission. If this is likely to affect your business you should look at their current commission structures and related documents. In addition, you should look at your current pay roll systems to check if these are able to calculate average historical commission payments that these employees would be entitled to in calculating holiday pay.

If one of your workers falls sick while on leave, there is nothing stopping them for taking annual instead of sick leave, or to cancel their annual leave request to take sick leave. However if your employee was genuinely ill they should comply with the notification and evidence requirements you need to treat the time away as sick leave and pay accordingly.

Remember employees do not have a statutory right to have leave on bank holidays, unless this is stated in the employee’s contract. Bank holidays can also be included in the 5.6 weeks leave entitlement or in addition to the employees annual leave entitlement but again this should be clear in their contract of employment.

Finally if an employee returns a few days late from their holidays, legally this is regarded as absent without leave and they are not entitled to be paid. In addition you may wish to take this up as a potential disciplinary matter.

Make sure you have a clear policy on dealing with leave requests

Being clear on your employer obligations is just part of the story when it comes to effective holiday and leave management. The key is ensuring that you treat all requests fairly and consistently and this can be best achieved by ensuring you have a clear policy on leave requests, for example:

• An agreed minimum periods of notice when requesting leave to ensure suitable cover can be arranged if necessary

• Post a holiday planner in a public space in the office, or use a shared calendar on your IT system which can ensure that the process is transparent and that members of staff can plan around each other where possible.

• Ensure that leave requests do not discriminate against particular employees (for example if an employee wants to take off time in a busy period for a religious festival you may want to consider this request where you may not consider such requests for leisure purposes)

• Ensure policies on leave entitlements, holiday pay, leave requests etc are included in your terms and conditions of employment 

Go further and find out the legal requirenments of employment 

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