Annual Leave on cessation of employment*
This issue arose in the case of Denis Ryan and Wallace Travel and Transport Services Limited ADJ-00032808. The employee in this case was laid off in March 2020 and subsequently in July 2020 the employee resigned. The employee sought holiday pay on the basis of Section 23 of the Organisation of Working Time Act. Section 23(1) applies where an employee ceases to be employer and under Section 23(1)(b) the employee is entitled to apply for the whole or any portion of the annual leave in respect of the current leave year or in the case of an employment ending which occurred during the first half of that year in respect of that year and the previous leave year or both those years remains to be granted to the employee the employee shall as compensation for the loss of the annual leave be paid by his or her employer an amount equal to the pay calculated at the normal weekly rate or as the case may be at the rate a portion to the normal weekly rate that they would have received had he or she been granted that annual leave.
This issue is likely to arise in case going forward of Redundancy in particular.
The annual leave year is set out in the Organisation of Working Time Act as being from the 1st of April to 31st March in the following year. A person who would be made redundant in October 2021 who was on layoff from March 2020, for example, would be entitled now to claim for the annual leave for the period 1 April 2021 to the date of termination and also for the period 1 April 2020 31 March 2021. Therefore, in the case of somebody who is laid off in March 2020 their only entitlement will be for the current leave year and the previous leave year which means in effect as they were not working and were on layoff they would not have acquired any leave entitlement.
However, take a situation where an employee was laid off in January 2021, they would actually be then entitled to claim for the annual leave year ending 31 March 2021 even though normally to bring a claim they would have had to bring it by the 31st September. The Legislation is somewhat unclear but this issue will only arise in the case of a cessation of employment. An employee whose employment has not ceased and who, for example, is called back to work would only have a claim for annual leave for the period from the 1st April of the current year and there would be no entitlement during that period because they were not at work.
*Before acting or refraining from acting on anything in this guide, legal advice should be sought from a solicitor.
*In contentious cases a solicitor may not charge fees or expenses as a proportion or percentage of any award or settlement.