Holiday pay is earned against time worked. All employees, full-time, part-time, temporary or casual earn holiday entitlements from the time work is commenced. The Organisation of Working Time Act 1997 provides that most employees are entitled to four weeks annual holidays for each leave year with pro-rata entitlements for periods of employment of less than a year.
The Act sets out 3 mechanisms for calculating the annual leave entitlements.
Employees are entitled to whichever of the following is the greater;
- 4 working weeks in a leave year in which the employee works at least 1,365 hours (unless it is a leave year in which s/he changes employment)
- One third of a working week for each month in the leave year the employee works at least 117 hours
- 8% of the hours an employee works in a leave year (but subject to a maximum of 4 working weeks). This is related to part-time employees.
* An employee who has worked for eight or more months must be allowed an unbroken period of two weeks holidays.
Re- Part-time employees
Note 1. Time spent on annual leave is deemed to be time worked for the purposes of the Act.
Note 2. Overtime hours should be included for the purposes of calculating entitlement to annual leave.
Examples for A & B
The annual leave entitlement of an employee who works a 39-hour week is computed as follows:
39 x 1/3rd x 12 = 156 hours
156 / 7.8 = 20 annual leave days
The annual leave entitlement of an employee who works a 33-hour week is computed as follows
33 x 1/3rd x 12 = 132
132 / 6.6 = 20 annual leave days
Note: You should check to see if your company is covered by an Employment Regulation Order/ Registered Agreement/ Joint Labour Committee that may have set additional leave over and above the Organisation of Working Time Act 1997.
Employees who Work Irregular Hours.
In the case of employees who work irregular hours, their holiday entitlements should be converted in hours. This is calculated by taking the normal weekly working hours divided by 5 and multiplied by the annual leave entitlement for that employee.
If an employee works a 39-hour week he/she is entitled to 156 hours per annum
i.e. 20 (days) x 7.8 hours = 156 hours
Each time an employee takes annual leave the number of hours s/he would have worked on the days taken should be added up to determine the amount of annual leave taken.
Note: In calculating how many days holidays to which an employee may be entitled, employers should include all hours worked including time spent on annual leave, maternity leave, parental leave, force majeure leave, adoptive leave and the first 13 weeks of carer’s leave. Employees continue to accrue annual leave while on sick leave. However, no annual leave is accrued during a temporary lay-off or a career break. Please note however that if an employee, while on annual leave becomes ill and this illness is covered by a medical certificate it does not count as part of their annual leave.
Under the Organisation of Working Time Act 1997, the onus is on the employer to ensure that employees can avail of their annual leave entitlement in the leave year to which it relates.
- The time at which annual leave is taken is at the discretion of the employer, having regard to work requirements and subject to his/her taking into account the employee’s needs to reconcile work and family responsibilities, and the opportunities for rest and recreation available to the employee.
- The employer must, if leave dates are being nominated by the Company, consult with the employee or their representative 1 month prior to the commencement of holiday leave.
- Annual leave must be given to the employee within the leave year, or with the employee’s consent within 6 months of the following leave year. The employer has the responsibility to ensure that the employee takes his/her full statutory leave within the appropriate period, or with the employee’s consent within 6 months of the following leave year.
- Employees may carry leave forward to the following year once the employer gives consent.
- Following 8 months work, the employee is entitled to an unbroken period of 2 weeks, which may include one or more public holidays. This provision may vary in the case of an employment regulation order, registered employment agreement, collective agreement or any other agreement between the employer and employee.
Payment for annual leave must be given in advance of the employee taking leave, this would include any regular bonus or allowance, but excludes over time. Employees are only entitled to be paid for leave /shift premium they have earned at the time of taking leave.
In the case of employees who work irregular/varying weekly working hours, payment in respect of annual leave is calculated by - adding up the employees total weekly working hours in the thirteen weeks ending on the day before annual leave, and dividing by thirteen to establish the employees average weekly earnings during that period. To calculate a day, the normal working week is divided by 5.
NOTE Payment in lieu of annual leave is prohibited unless the employment relationship is terminated. Also employees who are ceasing employment cannot be requested by the employer to use up leave entitlements unless this is organised one month before termination date. However, if both parties agree annual leave can be taken during the notice period.
The statutory leave year is 1st January to 31st December; there is no restriction on employers using different 12-month period provided that the same leave year is consistent.
Any dispute arising from the application of the Act concerning annual leave can be dealt with through the Workplace Relations Commission. The decision can be appealed to the Labour Court where the determination is binding.
View the full document here including a sample annual leave form. You can also download the document below: