News
A UK Employment Tribunal has awarded a senior employee more than £400,000 after finding that he had accrued over 800 days of untaken annual leave across several decades of employment. The case highlights the significant financial and other risks for employers who fail to properly manage holiday entitlement.
While rules differ in different jurisdictions, it is common for employees to have the ability to carry over untaken leave from one year to the next, whether by statute, policy or practice. This gives rise to a number of potential risks including:
· Unexpected accrued financial liabilities, as in this case;
· Risks to employee health through inadequate time off;
· The requirement in many jurisdictions to reflect outstanding liability for accrued vacation in company accounts.
Employers should keep holiday processes and documentation under review, particularly where:
· long serving employees have historically carried forward leave,
· informal agreements exist around deferral of holiday or payment in lieu or
· senior staff or managers are assumed to ‘self manage’ their holiday entitlement.
Failures to actively manage holiday entitlement can give rise to substantial and unexpected liabilities. Please contact us if you would like advice on managing annual leave and time off for employees.
