Pay in lieu of holiday when last day is in a different holiday year but holiday can carry into the next year

[FiveSecondsMore]

EDIT: I seem to be unable to post in the "work" section because the website is being buggy and keeps thinking I haven't logged in, so I'm trying here instead.

I haven’t posted here before, but I’ve seen helpful responses to HR / job-related questions in the past, so I thought I’d ask and hopefully someone with a better understanding than me will be able to answer!

I have recently accepted a job offer (though I’m just waiting for the final paperwork), and am planning to give my month’s notice at my current job very shortly, but I’ve accrued a fair bit of holiday that I haven’t yet taken, and so I expect to be paid a sum in lieu of that (I’m unlikely to use it all up during my notice period, since there are various things to wrap up at work).

My question is around the rules relating to pay in lieu of accrued holiday, if the end of my employment falls in a new holiday year. The holiday year at my current company is from January 1 to December 31, and I want to make sure I don’t lose out depending on whether I put my last day in December or January.

My contract states the following: “If you have holiday entitlement still owing, [the company] may … require you to take all or part of your outstanding holiday during your notice period or pay you a sum in lieu of holiday accrued but untaken in the holiday year in which your employment terminates. Annual Leave can carry over into the next calendar year … with a maximum accrual of 25 days.”

So on the one hand it says they will pay a sum in lieu of holiday accrued but untaken in the holiday year in which the employment terminates; but on the other, it says that annual leave can carry over into the next year, so I don’t know if the "carried over" holiday is then considered to be holiday accrued but untaken in the holiday year in which the employment terminates, and therefore due to be paid.

Can anyone shed any light on this? I need to get a move on if I’m going to make sure my last day is in December, and if it turns out that putting my last day in January would mean I lose all my holiday pay, I definitely want to go for the December option! (Otherwise I might go for the January option, to take the pressure off a bit.) I am based in the UK, in case that is relevant.

Thanks in advance for any advice you can give!

@MNHQ Please will you move this conversation to the "Employment Issues" section, where I assume it belongs? (And perhaps remove my first sentence too, if possible, since it won't make sense anymore!)

Carrying over holiday, I believe, is a privilege not a right. I think this means it's possible for a company to not pay carried over leave but I am basing this on a vague recollection not absolute knowledge. Hopefully HQ can get this moved over and someone will know more. Good luck in the new job

I'm confused about the sentence "Annual Leave can carry over into the next calendar year … with a maximum accrual of 25 days.”

How many days AL do you get a year?
How many days will you have outstanding as of 31st Dec/how many do you want to carry over?

I suspect you're overthinking this. They'll just work out what holiday you will be owed up to your last day and ask you if you want to take it or be paid it instead. It's pretty standard.

Actually, I get your concern on this one. We can only carry over 5 days, any more than that is list. But any carry over is 'at managers discretion' so they can refuse to carry over any of it. I'd be wary that they may refuse the carry over if you're on notice.

If you've got more than 5 days I'd resign before end Nov. 5 days or less you can wait but accept you might lose it

Not if you can only carry over 5 days to the next leave year, and the OP has 10 leave days outstanding. Then she'd lose 5 days by not taking them before her last day....

Lost not list

Carry over rules are for your employer to decide. But they can’t force you to lose your holiday. So as soon as you give in your notice, ask the question about whether you’ll get paid all of it including any carried over, or whether you need to ensure you take your 2019 entitlement before the end of the year.

Thanks for the replies everyone :)

Yeah, the issue is that I actually have about 15 days that I've accrued since January but haven't taken yet (this is partly because I had some carry-over from last year, giving me some extra to use up before I started working through this year's allowance). In reality it's going to be difficult for me to use this all up before the end of the year, which is why I'm keen to know if it makes a difference whether I put my last day at the end of December or in January (from the standpoint of ensuring I don't lose pay in lieu of holiday accrued).

I suppose a related question that I have is this: if my last official day was the 31st December, is there any doubt about whether I would get paid my accrued (but untaken) holiday for this year? Would that definitely count as "holiday accrued but untaken in the holiday year in which [my] employment terminates", given that it's the very last day of the holiday year?

To clarify the situation, we get 25 days' annual leave (in addition to public holidays) per year, accrued on a pro-rated monthly basis. The clause saying that "a maximum accrual of 25 days" can be carried over just means that at any one time you can have a maximum balance of 25 days accrued and "in the bank", available to use. So if, say, you had saved up a balance of 25 days at any point (which could happen by taking very little leave over a long period, but in reality would be rare), you would stop accruing more until you used up some of your balance, taking you below that cap.

If you leave at the end of December you definitely won’t lose it. If you leave in January the way you ensure you don’t lose it is check when you hand your notice in, and if they say you won’t get paid it out, take it this year.

“It would be difficult to take it” doesn’t matter when the alternative is you losing it. If your employer don’t want you off work for most of December, they’ll let you carry it out and be paid it on departure.

You should be taking your holidays instead of having this kind of build up in December. The policy isn’t clearly worded though. If I were then I’d probably make you take it in your notice period, if possible, which it might not be.