Holiday entitlement often gives rise to payroll queries as to how it should work. It is more a personnel issue than a payroll issue.
This item is meant to help you, the employer, understand and comply with the provisions of the new Organisation of Working Time Act, 1997.
Annual Leave.
The most significant aspect of the new Act is the EU-wide introduction of a minimum entitlement of 20 days’ annual leave for all employees.
A leave year is defined as “a year beginning on any 1st. day of April”. There is no obligation on employers to change the leave year to 1st. April to 30th. March, where the practice has been to use the calendar year, however, care has to be taken to ensure the appropriate leave is given referrable to that period.
The minimum 20 day annual leave is being phased in over a three year period, as follows:
HolidayYear Entitlement
01 Apr 1997 to
31 Mar 1998 16 days
01 Apr 1998 to
31 Mar 1999 18 days
01 Apr 1999 to
31 Mar 2000 20 days
Annual leave of 20 days accrues according to the amount of hours worked in a leave year. Any employee who works at least 1,365 hours is entitled to 20 days’ annual leave.
Any employee who has worked eight or more months in a leave year is entitled to an unbroken period of two weeks’ annual leave.
Scheduling Holidays
Businesses with compulsory holiday periods – Christmas or August, could find these arrangements challenged as a result of the new legislation.
Holiday Compensation
It is illegal to pay an employee instead of allowing the statutory minimum holidays. Compensation for unused holidays only arises when an employee is leaving employment.
Calculation for Normal Holidays
Salaried Employees.
Holiday pay is calculated by reference to the pay for the week immediately before the leave.
Hourly Paid Employees.
The holiday pay is an average of the 13 weeks immediately before the leave.
Calculation for Bank Holidays
Salaried Employees.
The amount paid for the normal working hours last worked by the employee applies.
Hourly Paid Employees.
The average daily pay calculated over the preceding 13 weeks applies.
Sickness & Holidays
If an employee provides you with a medical cert for illness while on annual leave, the relevant days are not treated as annual leave. Therefore, if an employee is ill for one week of a two week’s holidays, he/she has only used up one week’s holidays! This is the case even where the employee is ill while on holidays on a world cruise!
If an employee makes a complaint to a Rights Commissioner and it is upheld, the employer is required to comply with the Act. The Rights Commissioner may also recommend compensation up to a maximum of 2 years’ pay for the employee.
Ardbrook Ltd
1st Floor, 111 New Cabra Road, Dublin 7. P 353 1 8382921-F 353 1 8683098
E info@ardbrook.ie
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