Annual Leave Purchase

Lula001

My colleagues and I are having a discussion at work about Annual Leave purchase, one of then says that if you purchase annual leave then you are not working to accrue your normal leave. My argument is, that if this is done, you are paying twice. Can someone help to settle this argument please.

[Deleted User]

It won't impact your standard leave.

Takeaway_Addict

Deleted_User wrote: »

It won't impact your standard leave.

Though I think the OP's colleague is right. Holiday is based on 46.4 weeks work for statutory.

If you purchase say 2 weeks extra then this could reduce your entitlement downwards.

I think though its highly unlikely a company that offers AL purchase in the first place would be that bothered by 1/2 a day.

maisie_cat

I think your colleague is technically correct, but it is something that few will get.
Annual leave is generally earned on paid hours, so buying leave is equivalent to going part time, albeit in small temporary way. AL is usually earned at a rate of x days earned per month attended etc
If a person earns £38480 with a company that has a standard 37 hour 5 day week with say 30 days leave(incl BH). Paid hours are 1924 (52*37) & attended hours are 1894 (1924-30). The hourly rate gross is £20 & the leave is 1.56%
If a person buys back another 10 days at £20 they sacrifice will be £1480 (37*2*£20) & earn £37000 for 1850 attended hours. This equates to £20 a paid hour and they should now get annual leave of 28.86 or probably 29 days.
Buying leave is rare so most companies will simply deduct the £1480 and be done with it. It will depend on whether the scenario is covered in the staff handbook or contract of employment, but technically you shouldn't get double bubble.
I have managed finance, HR and payroll for a number of companies and have spent many hours explaining to staff why they can't have it both ways. It is complicated by the bank holidays, although many organisations now included BHs making it fairer.
If you take it to it's extreme you could argue that if somebody buys a 6 month break & they should still get the 30 days, clearly wrong.
If it is a regular thing I would take the view that there isn't enough full time work if staff can buy extra leave so easily. That might imply that the organisation is slack and prompt a review.

steampowered

If your contract gives you a fixed entitlement to a certain number of days leave, that is what you will be entitled to.

So for example if your contract says you get 27 days annual leave plus bank holidays, that is what you will receive. Regardless of whether you buy extra annual leave.

I've bought an extra 5 days leave for a number of years, and it doesn't affect my remaining annual leave entitlement.

maisie_cat wrote: »

If it is a regular thing I would take the view that there isn't enough full time work if staff can buy extra leave so easily. That might imply that the organisation is slack and prompt a review.

I think it depends on the sector maisie. Nearly all of the professional services employers in London (banks, law firms, accountants etc.) offer their employees the ability to buy or sell up to 5 days annual leave each year. It has become a bit of an industry standard.

Of course selling would only be permitted to the extent you would remain above statutory minimum.