Ratification of the EU’s Working Time Directive in 1998 brought some important changes to UK businesses. It’s safe to say that HR departments are now up-to-speed on both of the Directive’s central tenets: that holiday entitlement commences on the first day of a new job and not after some arbitrary ‘qualifying period’; and that employees can ‘roll over’ holidays from one year to the next.

But that second point raises a further, significant issue…as the savvier personnel managers have recognised. While UK law provides a Statutory Entitlement of 5.6 weeks of paid holiday each year, the EU ‘rollover’ provision applies to only four of them.

An employer may decide to play nice by allowing an employee to roll over the remaining days…and, indeed, many of them are opting to do so, especially in light of the changed working conditions which have followed the pandemic. But they’re under no obligation.

Now, rollovers are likely to be a hot potato for HR departments, especially for those whose companies operate across multiple EU countries. (Different member states have different Statutory Entitlements, remember.) It’s apparent that you and your staff will need a clear framework for any negotiation. Hence the novel concept of ‘Holiday Years’.

A Holiday Year is an anniversary which you use in calculations of annual leave entitlement. It’s a bit like a Corporation Tax return date — arbitrary, but immovable.

What are the normal Holiday Year dates?

The easiest – and therefore commonest – approach is to start your Holiday Year on January 1. After all, everyone knows when New Year is coming up, so no-one will have to make any difficult calculations. The drawbacks are that you’ll have a rush for the exits in November and December as employees use up their annual entitlements, when you may find yourself struggling to find temporary cover. Also, your finance department may prefer ‘Plan B’.

If these considerations apply to you, read on…

Is there a ‘Plan B’?…

Accountants whose companies rely on temporary and contract staff have a hard time with tax calculations and the like. Such outfits may try to reduce the administrative burden by beginning employment contracts at the start of the financial year – April 5 – whenever possible. If you start the Holiday Year on the same date you’ll improve matters further…but be prepared for confusion on the part of your employees!

A minority of companies choose other dates for their Holiday Years: the Tom Cruise Special (“Born On The Fourth Of July”); the Michaelmas Term (Feast of St. Michael, 29 September); or some other significant occasion. By all means follow their example, but remember that you’ll have to live with whatever date you choose.

…or even a radical alternative?

In today’s increasingly fluid workspace, employees may chafe against any restraint, even that of a shared Holiday Year. The cutting-edge solution is to set a personalised Holiday Year for each employee, resetting on the anniversary of their start date. This approach which avoids any seasonal employment crunch, but is difficult to manage with paper-based tools.

Whatever Holiday Year you choose, LeavePlanner will make your administrative tasks easier. (You probably wouldn’t want to set personalised Holiday Years without it!) Give us a ring to find out more.