Madison has experience dealing with both contentious and non-contentious employment law matters. Madison advises a range of employers across various sectors on all aspects of employment law. Madison’s practice area includes advisory work and corporate transactions.
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This month's question:
"An employee was on a fixed term contract and had 16 hours of annual leave left when they resigned. Does the employer have to pay the employee for the untaken leave or can they be asked to take leave instead?"
In Northern Ireland, if an employee leaves employment with accrued but untaken annual leave, they are generally entitled to payment in lieu of that accrued leave on termination. This applies whether they resign, are dismissed or their fixed term contract ends. However, if the employee is still working their notice period, the employer can require the employee to take annual leave during that notice period, provided that the correct notice is given under the Working Time Regulations (Northern Ireland) 2016 and/or follow any contractual provisions. An employer can require an employee to take annual leave on specific dates but the employer must give notice equal to twice the length of the leave. Further the employee and employer may mutually agree that annual leave will be taken during the notice period (we would recommend this is agreed in writing for the avoidance of doubt). In those circumstances, some or all of the outstanding leave may be taken before employment ends rather than being paid on termination. Employers will also want to consider if a handover is important for the role because compelling an employee to take annual leave may impact the operations of the business.
An employee could potentially have grounds to bring a claim for unlawful deduction from wages and rely on their statutory holiday rights, if their employer refuses to pay them for accrued but unused leave upon termination. Unlike an unfair dismissal claim, there is no qualifying period for an unlawful deduction of wages claim, therefore, the fact that the employee was employed on a fixed-term contract does not affect the employee's right to compensation for accrued but unused leave. Therefore, if the employee still has 16 hours of annual leave remaining when their employment ends and they have not taken it before their last day, the employer should pay them for those 16 hours in their final pay.
This article was provided by Madison Bowyer, an Associate in the Employment Law Group at Arthur Cox NI.
T:+44 28 9026 5886
E: Madison.bowyer@arthurcox.com
https://www.arthurcox.com/
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