Additional annual leave

Introduction

Employees in the UK have a statutory entitlement to 28 days’ paid holiday per year.  The University gives its employees an enhanced entitlement to 38 days’ annual leave per year (pro-rata for part-time staff), inclusive of bank holidays and fixed closure days. Employees with more than five years’ continuous service are also entitled to additional ‘long service’ leave. This generous annual leave entitlement allows staff flexibility to use holiday entitlement both for restorative breaks and to take time away from work to deal with family, caring or other commitments. 

Some staff, for example those with caring responsibilities for dependent relatives, may need to take frequent annual leave days in order to deal with care commitments and, as a result, may find that the standard leave entitlement does not leave them sufficient annual leave to take restorative breaks themselves. 

The University therefore offers an Additional Annual Leave scheme, through which staff can request up to 10 additional days’ annual leave in each holiday year.  Where approved, this additional leave is then added to the annual leave entitlement for the year and used in the same way as standard annual leave.   The cost of the additional days’ leave can either be met by a salary reduction at the time that the leave is taken, or through an arrangement whereby the leave can be exchanged against salary over a period of up to 12 months (salary sacrifice), in order to reduce the impact of the  salary reduction. Please note: for operational reasons not all departments are able to offer this scheme, or offer the full 10 days.  See ‘availability of the additional annual leave scheme'.


Availability of the additional annual leave scheme

It is recognised that in some areas of the University operational requirements may mean that it is not possible for a department to offer additional annual leave to any staff, or to particular groups of staff (for example, a service with a minimum staffing requirement where agreeing additional leave requests would require additional staff to be engaged and trained in order to meeting operational needs). In some cases it may only be possible to offer this on a reduced basis ie fewer than 10 days per annum. In such cases departments should explain why the scheme is unavailable, or available only on a reduced basis. Staff who still require flexibility in working arrangements should consider other options  such as a temporary or permanent flexible working request.  

Where the scheme is made available, requests to participate in the scheme are subject to the approval of the employee’s line manager who must consider operational requirements, and whether the work requirements of the department can be met without additional cost if the request is approved. It is at the discretion of the department whether individual requests can be agreed, agreed in part, or refused completely on operational grounds. The department’s decision is final.

Eligibility

All staff who have at least 26 weeks’ continuous service[1] are eligible to apply for additional leave, unless:

  • their employing department has indicated that it is unable to offer this arrangement (see ‘Availability of the additional annual leave scheme’ above);
  • the effect of the salary sacrifice for the requested annual leave, when amalgamated with any other salary sacrifices for other schemes (for example childcare, pensions, etc) would result in the individual’s hourly rate falling below the National Minimum Wage rate in force at the time;
  • they are variable hours employees: holiday entitlement for variable hours staff is calculated retrospectively on the basis of hours actually worked. This scheme requires hours of work and associated holiday to be known in advance and the scheme therefore cannot be made available to them. Variable hours staff who require additional flexibility in their working arrangements should speak to their line managers about whether their required working hours can be adjusted;
  • they are term-time only employees:  for staff engaged to work term-times only, it is usually the case that holiday cannot be taken during term-times.  The provisions of this scheme therefore do not apply to term-time only workers.


[1] In line with statutory entitlements to request other flexible working arrangements.

How the scheme works

How much additional leave can be requested?

Full-time staff may request from one to 10 additional days’ annual leave (to be requested in full days) in each complete leave year.

Part-time staff: annual leave for part-time staff is usually calculated in hours. For part-time staff the maximum number of additional hours that can be requested should be pro-rata to their contracted FTE. For academic-related staff the maximum number of hours for a full-time member of staff is 75 (equivalent to 10 days at 37.5 hours per week), and for support staff the maximum number of hours is 73 (equivalent to 10 days at 36.5 hours per week). 

Example:  an employee working 60% FTE could request
academic-related 75 hours x 60%   = 45 hours
support staff 73 hours x 60%  = 44 hours

How much salary is exchanged for the additional leave?

The application form (available from your HR contact) contains a calculator tool which assists with these calculations.

Full-time staff

For full-time staff the amount of salary exchanged for each additional day is calculated as follows: 

  • basic annual salary (ie before any allowances are added) ÷ 260 (working days per year) = salary amount to be exchanged for each day of additional annual leave that is requested;  
  • Multiply by number of days requested (to maximum of 10) to calculate total cost;
  • Divide total cost by the number of months of the requested salary exchange period to calculate the amount to be exchanged from each month’s salary.

Example - full-time employee

A full-time employee with annual salary £28,143 requests 10 additional days’ annual leave, with salary to be exchanged over 12 months.

£28,143 ÷ 260 = £108.24 per day

x 10 days  =  £1,082.42 total cost

÷ 12 months’ salary exchange = £90.20 per month 

During the salary exchange period the monthly basic gross salary is therefore reduced from £2,345.25 to £2,255.05 per month and tax and NI deductions are made against this lower amount. Pensions deductions continue to be calculated using the unreduced amount.

 

Part-time staff

For part-time staff  the amount of salary exchanged for each additional hour’s leave is calculated as follows:

  • Divide annual gross salary by 52 to get rate for one full-time working week;
  • Divide by 36.5 (working hours per week for support staff) or 37.5 (notional working hours per week for academic-related staff) to calculate the amount to be exchanged for each hour requested.

Example - part-time academic-related employee

A part-time employee working 80% FTE with a salary of £30,438 requests 30 hours additional leave, to be exchanged over 12 months.

£30,438 ÷ 52 = £585.35 per working week

÷ 37.5 hours per week = £15.61 per working hour 

x 30 hours requested = £468.28 total cost

÷12 months’ salary exchange = £39.02 per month

The gross monthly salary is therefore reduced by £39.02 per month and tax and NI deductions are made against this lower amount. Pensions’ deductions continue to be calculated using the unreduced amount.

How does the salary sacrifice work?

Staff who are given approval to participate exchange salary for additional leave in monthly instalments over a full annual leave year or, where approval is given mid-way through the annual leave year, over whatever period of the leave year remains at the point at which the application is approved. 

Thus, if an application is approved at the beginning of the holiday year, the total (calculated as above) can be divided by 12, and 1/12 of the total exchanged from each month’s salary. If the application is approved halfway through the holiday year the total can only be divided by 6 and exchanged over 6 monthly payments. 

The application form (available from your HR contact) asks the individual to indicate their preference and agree to the necessary Payroll actions.

Applications

The employee should complete a ‘Request for additional leave’ application form (available from their local HR contact) and give it to the person who normally approves their holiday requests.  The form specifies the amount of leave requested and the agreed period of salary reduction. By signing the form the employee indicates their acceptance of the change in their terms and conditions of employment.

When can applications be made?

Normally it is expected that requests will be made before the start of the annual leave year.  However, with departmental agreement, requests for additional annual leave can be made at any point during the year, as need arises.  

(See above ‘How does the salary sacrifice work’ for information about how requesting leave during the course of the leave year will affect the salary exchange arrangements).

Only one request per year will be allowed: if less than the maximum number of days/hours is requested, it will not be possible to make a further request until the following year.  In the event that additional leave is needed, this can be requested as unpaid leave on an ad hoc basis, and deductions made from salary in the normal way for unpaid leave.

Can additional days’ leave be requested for the current year only, or on a permanent basis?

Due to the way that the salary sacrifice calculations are made requests can only be made for the current holiday year, but repeated requests can be made for subsequent holiday years, subject to operational considerations.

Where an employee would like to request additional annual leave on an ongoing, rather than one-off basis, consideration should be given to whether a permanent FTE reduction would be a more appropriate way of accommodating the arrangement.  A small FTE reduction might, for example, allow a member of staff to accrue an hour’s leave entitlement per week, to be taken through a time-in-lieu equivalent arrangement. For example, reducing an academic-related post from full-time hours (notionally 37.5 hours per week) to 96% FTE would give a reduction in 1.5 working hours per week.  This could be taken as a weekly reduction in working hours or, by agreement, the hours could be accrued and taken in blocks.

Considering applications

Where the scheme is offered (assuming that staff meet the eligibility criteria above) it is at the discretion of departments whether to agree to a request in full or only in part (for example, agreeing to 5 days rather than 10), or to refuse it altogether on operational or other grounds.

Line managers are expected to give very careful consideration to all applications, but it will not always be operationally possible to agree additional leave, and it must be stressed that the scheme is entirely discretionary. If the line manager is unable to approve the request then the reasons for this should be discussed with the employee, but no specific appeal mechanism applies.

Where multiple applications are received within a team, and it is not possible to grant them all in full, line managers should consider the most objective and fair way of accommodating requests. This may mean partial approval of all requests, rather than agreeing to some in full while others are turned down.

Managers are not expected to make comparative value judgements about the reasons for application in considering whether to approve requests.  However, managers should be mindful of the circumstances which led the individual to request the additional leave.  Whilst staff may request additional leave for any reason, some staff will be requesting the leave in order to help them to manage complex family or caring responsibilities. In the latter circumstances, in the event that a request for additional annual leave cannot be accommodated the complex circumstances will remain and it will be helpful to discuss what other flexibility might be offered.

Agreeing requests

Where an application is agreed by the line manager the application form should be sent to the department’s HR contact or departmental administrator so that the salary sacrifice can be actioned and the annual leave record set up appropriately showing the additional leave.

Once an application has been accepted it will be a binding agreement between the University and the employee and cannot be revoked until the end of the holiday year. The ‘Application for additional leave form’ should be copied to Payroll to action the salary exchange and a copy of the form retained on the individual’s personnel file.

How can additional leave be taken?

The additional annual leave will be added to the employee’s annual leave entitlement for the year (in the same way that additional long service leave days are added), and may be taken during the annual leave year subject to the usual approval arrangements.  The normal rules concerning holiday apply.

Changes to contractual/working arrangements during the course of the year

During the course of the holiday year an employee’s salary may change, for example due to incremental progression, regrading, or merit award.  The employee’s working arrangements may also need to change, for example, the individual may need to take unpaid sickness or other leave of absence from the workplace.  Such changes are likely to affect the salary exchange calculations made when the scheme was agreed. 

Wherever a change to contractual or working arrangements is effected during the course of the holiday year which significantly alters the individual’s salary or working hours, it is advisable to tally up the additional leave that has been agreed and leave taken as at the date that the change comes into effect, and come to an arrangement about “settling the account”.  (Annual Cost of Living rises may not be considered significant enough to merit a recalculation).  A new arrangement may then be set up, if appropriate. 

What happens when an employee leaves their post during the holiday year?

When an employee leaves their post it is standard for a calculation of annual leave entitlement to be made.  Where additional annual leave has been purchased, it is clearest to separate out the contractual annual leave entitlement, and additional leave.  Additional leave should only be included in the ‘entitlement’ to the extent that it has been already accounted for through the salary sacrifice.

Ie.  Full-time employee with 38 days leave entitlement, who has purchased 10 days additional leave, leaves work after 6 months: use the holiday calculator spreadsheet to calculate the part-year entitlement based on 38 days.  Of the 10 additional days, 5 will have been accounted for through the salary sacrifice.    Add these 5 to the total entitlement as calculated and deduct any holiday already taken to establish outstanding leave entitlement.

Impact on pensions

Members of USS and OSPS - Pension contributions are deducted from salary before the salary exchange has been applied and therefore there is no impact on pensions.

Members of other pension schemes - please seek advice from the Pensions team before applying.  Where it is not possible for the salary exchange to be applied, employees and managers may agree that a number of days’ unpaid leave can be taken, and deduction for the unpaid leave will be made through normal procedures.

Other leave options

A number of other flexible working options are available. 

  • Staff who have children under 18 can also request periods of unpaid leave (in blocks of minimum one week, to a maximum of four weeks per year) through the statutory unpaid parental leave scheme which, if approved, result in a salary reduction at the time that the leave is taken.
  • Those with other caring responsibilities can make similar requests through the University's short-term/carers leave scheme.
  • You can make a flexible working application for a temporary or permanent reduction or change to working hours.
  • There is a career break scheme for those needing longer breaks away from the workplace for caring reasons.

Visit the Parents and Carers web pages for more information.