Annual Leave

By MSS IRL. Apr 23, 2020

23rd April 2020


Annual Leave

We can be sure that, at this time, no one is probably planning their holiday arrangements, due to the current uncertainties and lockdown. However, it is possible that when we are allowed to return to work, we will be heading into the holiday season and employees may at that stage, have accrued a lot of time off if they have not yet taken any leave. At the same time, we hope our employees will be needed to address the uplift in work and getting back on the road again. Hence, the importance of planning how to avoid a holiday crisis.

Statutory Leave Year 

Firstly, the statutory holiday year is April to March, though most companies use January to December as their leave year. This is important, because if a claim is made under the Organisation of Working Time Act 1997, this is the only leave year that a claim can be based on if the claim concerns annual leave, regardless of what the holiday year in the contract states.

Do Employees Accrue Annual Leave during Lay-Off?

Annual leave accrues under the Organisation of Working Time Act based on the number of hours worked by employees, subject to a maximum of four working weeks. Where employees have been placed on lay-off, these employees do not accrue annual leave during the specific weeks that they have been laid off, however it is important to note that if they have worked 1,365 hours in the leave year, then they will still be entitled to their full four weeks annual leave. The question of whether annual leave accrues whilst employees are on the Wage Subsidy Scheme, which is basically de facto Lay-Off, has not been clearly defined by the Government legislation or adjudication as of yet. If an employer takes the position that it does not accrue, they should be mindful that it is possible that this could be deemed unlawful. Accrual of contractual leave in excess of statutory leave whilst in receipt of the WSS payment will accrue unless the contract states otherwise.

Employer Responsibilities

Under this Act the employer is responsible for ensuring employees take their leave. In exercising that responsibility, the employer must take into account the need for the employee to reconcile work needs, family responsibilities and the opportunities for rest and relaxation, even if the employer wishes to nominate when holidays will be taken, which can be done where at least a months’ notice has been given.

At the moment some employers have already organised employees to take leave during this COVID 19 period, to use up entitlements, but the overall number is probably quite small. Yet, if we consider that the normal leave entitlement for full time employees is 4 working weeks plus Public Holidays, and the fact that we only have 8 months left to take them in, (if January to December is your leave year), if and when things pick up we may need all hands to the wheel and holidays could be a nightmare.

So, what can an employer do?

Employers are entitled to nominate when holidays can be taken. To do this the employer is expected to consult the employee or their trade union (if any) at least a month before the date nominated for leave to be taken. This means that the employer can nominate holidays to commence in a months’ time which will allow the employer to organise the workforce, especially if there is going to be a phased return to work. If it is the case that an employer wishes to start using the leave earlier then employees could be asked to come forward, request employees to indicate holiday dates for the rest of the year and advise that if they do not do this the company may have to nominate when they take them or they could be organised by agreement..

What if all annual leave cannot be used up?

If it is the case an employee is unable to use up all the annual leave within the January to December leave year, then it should be remembered that there are still three months left in the Statutory leave year before you are in breach of the Act. In addition to this leave can be carried over to the next leave year provided there is agreement and the leave is taken within the first six months of the new leave year. This gives an employer up to the end of September 2021 to use up any carried over leave and hopefully to also use up current leave as well at that stage.

Why not just pay the outstanding leave?

Employers cannot pay employees for outstanding leave unless the employee is ending their employment with the company, so this is not an option for current employees.

So, what do you do?

  • Identify how much leave is currently due to all your employees.
  • Identify how much leave the company will need for periods where the company shuts down e.g. Summer shut down, Christmas
  • Work out how to spread the balance over the remainder of the leave year
  • Request employees to submit their leave requests for 2020 by a specified date so that the company can organise them in a manner fair to all or reflect any established booking practice that may apply in the workplace, around the needs of the business.
  • If necessary, nominate when holidays may be taken by giving the appropriate one months’ notice
  • If all leave cannot be used up, agree to carry over leave into the next leave year.

Can employees take leave if on the Subsidy Scheme?

Yes. The employee is still at work so this can be done and as the scheme runs to the 25th June, it is likely that employees will be taking leave during this time.

Can employees take leave whilst on the Pandemic Unemployment Payment?

No. An employee cannot receive payment from their employer during this time.


This update is provided by the MSS HR Support Service.


Further details on the update or about our services may be obtained from:
John Barry/Tara Daly/ Hugh Hegarty at tel: 01 8870690


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