With accruing holidays and the significant resourcing and financial issues these are starting to create…have you thought about an Easter shutdown?
The pandemonium of the COVID virus in 2020 wreaked havoc with the way in which employees usually take holiday. Options for leave were severely limited due to lockdown restrictions, and workers were reticent about using holiday whilst sat at home. The Government, in fact, supported this growing issue by ringfencing 20 days of leave to be carried forward into the next two holiday years of 2021/22. This effectively gives a temporary break to the contractual ‘use it or lose it’ clause present in most Contracts of Employment affording leave to be carried forward, yet still remaining as a liability to employers.
The Government did ask employers to be compassionate when it came to the management of holiday. However, it did not block the rights afforded to employers under r.15(4) of the 1998 Working Time Regulations, permitting holidays to be enforced by giving twice as much notice…simply give at least 10 days’ notice in writing to enforce 5 days accrued holidays.
So why would you do this?
Consider how much accrued leave your workers are carrying forward from 2020, along with that already accruing this year. A full-time worker is entitled to 28 days of paid leave each year. Many of our Clients are already concerned about the problems this holiday accrual will have for their business, the impact it will have later in the year and the detriment it could have on production, output and sales. Coupled with this, come the end of a company’s financial year a liability needs to be apportioned in the Balance Sheet for any accrued untaken leave. In turn, this could have a profound affect on the ability to secure new work and future borrowing. To put some perspective on this:
An employer with 20 employees, who carried forward 10 days each from 2020 and have now accrued another 2.3 days in 2021 already has a liability of 246 days of holiday to plan! Assume each worker averages £100 per day then this is £24,600 financial liability. This is only the tip of the iceberg for many Clients that we advise.
With nationwide lockdown measures likely to ensue for some time, now is the time to start considering how some of this holiday liability can be used at a time that suits your business need. Being sympathetic to employees, as the Government suggested, may not be an option if the business cannot sustain these increasing costs. We are strongly encouraging all our Clients to review their situation regarding accruing holidays now. While lockdown measures are still impacting on normal operations, then it will be prudent to fix some of the accrued leave for use in the near future, and the natural Easter holidays at the beginning of April could be the right time to do this. Inform your workers now of any intentions to enforce holidays, but do set out your valid business reasons for doing so. There is nothing more to it.
THSP’s Employment Safe service can support your individual business needs and help you to manage your workforce using the best practices. If you need help with your homeworking policy or for more information on how our Employment Safe service and HR tool, Tribe, can help your business, call us on 03456 122 144 to speak to one our friendly advisors today.