Annual Leave

Annual leave is the worker’s right to take holiday, or vacation, and be absent from their job. The amount of holiday they can take will be as stated in their employment contract/terms of engagement, or statutory minimum, whichever is greater.

In the Isle of Man, statutory annual leave is provided under the Annual Leave Regulations 2007[1] (the “ALR”). The ALR were amended in 2020 to address the effect of Covid on taking annual leave[2].

Regulation 4 ALR entitles workers to four weeks’ paid annual leave in each leave year, which can include bank holidays if this is what their written terms say.

Under the ALR, a worker can notify their employer of the days on which they wish to take annual leave subject to the employer’s right to require the worker to take, or not to take, leave on particular days (again, notice is required).

Except on termination of employment, a worker does not have the right to be paid in lieu of untaken leave but may, depending on the terms of their contract, be able to carry it forward to a subsequent leave year. (There are special rules where Covid has prevented annual leave being taken.)

On termination of employment, the worker is entitled to be “compensated” for untaken accrued annual leave. If they have taken more than their pro rata entitlement at the point of leaving then the employer may be entitled to deduct payment representing the “excess” holiday, subject to what the contract provides for.

Annual leave may not be taken while the worker is on family leave or sick leave.

For workers with variable hours/working patterns, it is possible to pay “rolled up” holiday pay (“RUHP”) provided certain “rules” are followed – e.g. the RUHP must be a genuine addition to normal pay and be specified in pay statements. Otherwise, holiday pay is calculated by reference to a “look back” period taking average hours worked over 12 weeks and the average pay rate for those hours.

The European Working Time Directive does not apply to the Isle of Man.

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References:-

[1] Statutory Doc. 102/07

[2] Annual Leave (Amendment) Regulations 2020

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Useful Resources:-

https://www.gov.im/media/1369852/holidays-and-holiday-pay-july-2020.pdf