EAST AYRSHIRE COUNCIL

CABINET - 2 NOVEMBER 2016

ENHANCED ANNUAL LEAVE SCHEME

Report by Depute Chief Executive (Safer Communities)

PURPOSE OF REPORT 1. The purpose of this report is to seek Cabinet approval for the introduction of

an Enhanced Annual Leave Scheme. BACKGROUND 2. The Council recognises the growing demands placed on employees to try to

achieve a work-life balance and by allowing flexibility in working arrangements, can assist with accommodating individual circumstances in line with the needs of the service.

3. As part of the Council’s commitment to flexible working, this scheme allows

employees the opportunity to supplement their existing annual leave entitlement.

4. This scheme applies to all employees of East Ayrshire Council with the

exception of teachers and term time employees. Whilst term time working is accessible by all East Ayrshire Council employees as a means of flexible working, the nature of term time working is such that all leave must be restricted to school holiday periods.

5. This scheme allows employees to buy annual leave through the purchase of

additional hours to increase their leave entitlement. Many employees, especially those on basic annual leave entitlement, could choose to enhance their existing entitlement by buying additional leave and using this throughout the leave year.

6. Leave that can be bought is in blocks of a week to a maximum of 2 weeks, i.e.

2 x the equivalent of an employee’s contractual hours, e.g. 35 or 37 hours for

full time employees, pro-rata for part-time employees.

CURRENT POSITION 7. At present employees are entitled to annual leave ranging from 20 days to 30 day per annum dependent on length of service (pro rata for part time employees).

8. Analysis of current leave entitlement has shown that of the 3721 employees who have an annual leave entitlement (i.e. excluding term time employees) 27.03% are on the minimum entitlement of 20 days annual leave per annum. These employees will be new to the Council either at the start of their working lives or having transferred from another employer. The introduction of an Enhanced Annual Leave Scheme would be particularly beneficial to these employees affording them similar benefits to their longer serving colleagues when balancing home and work commitments. 9. While provisions for additional time off are contained within the Special Leave

Scheme (currently under review) these are for very specific circumstances and do not afford the benefits offered by the introduction of an Enhanced Annual Leave Scheme.

10. The Council currently operates Flexi Time arrangement within a number of

predominantly office based services. These arrangements are kept under review and will be further considered as we transform as an organisation in response to the changing needs of residents and employees.

BENEFITS OF INTRODUCTION OF ENHANCED LEAVE SCHEME 11. The scheme will allow employees the opportunity to supplement their existing

annual leave entitlement, which will assist in allowing flexibility and a greater work-life balance.

12. Recognising that our employees are our most valued asset; the introduction of flexible and supportive employment policies such as enhanced leave will support greater wellbeing amongst employees and define the Council as an employer of choice when recruiting for the future. 13. The introduction of the enhanced leave scheme (unlike unpaid special leave provisions) allows employees to spread the impact of salary reduction, with Payroll making deductions direct from an employee’s salary over the leave year. 14. A proposal to allow the buying of additional annual leave has also been submitted through the Councils “Bubble Chamber” and is currently the highest rated proposal. Introduction of an enhanced leave scheme would demonstrate our support of employee suggestions though this mechanism. FINANCIAL AND RISK IMPLICATIONS 15. There are no additional costs with the introduction of this scheme however

there is considerable potential income which would impact directly on budget pressures in the forthcoming years.

16. Income to the Council would be the total of the salary foregone plus the

associated employer’s costs. Savings will depend on take-up of the scheme,

but for indicative purposes if 200 employees (average salary £28,000) opt to buy 2 weeks annual leave, then the Council will generate income of approximately £0.240m to £0.287m per annum.

17. The key risk associated with allowing additional holidays to be “purchased” will be the ability to continue to deliver services at an appropriate level. A key decision will therefore be whether the request can be delivered within the exigencies of the service. It is not anticipated that issues to service delivery will be significant and can be offset increased employee engagement and well-being. HUMAN RESOURCE IMPLICATIONS 18. Human Resources implications are detailed in paragraph 11 – 14 as detailed

above. EQUALITY IMPACT ASSESSMENT 19. An Equality Impact Assessment has been carried out in respect of this

scheme with no issues identified. TRADE UNION CONSULTATION 20. The Trade Unions have been consulted and they have formally confirmed

their agreement. COMMUNITY PLANNING/IMPLICATIONS 21. There are no community planning implications arising from this report. LEGAL IMPLICATIONS 22. The proposed scheme will ensure that the Council continues to meet its

legislative requirements as an employer. The proposals meet the pursuit of continuous improvement and best value.

COMMUNICATIONS 23. Promotion of this scheme will commence immediately in advance of the new

leave year. In addition, employees will be advised of the scheme via the Council’s Intranet site and a PER circular will be issued.

RECOMMENDATIONS 24. Cabinet is asked to: i) Approve the introduction of the Enhanced Annual Leave Scheme; ii) otherwise note the contents of the report. Chris McAleavey Depute Chief Executive (Safer Communities) 19 OCTOBER 2016

LIST OF BACKGROUND PAPERS Nil

Any person wishing further information should contact Paul McGowan, Head of

Human Resources (Telephone 01563 576092).

Implementation Officer: Paul McGowan, Head of Human Resources

Appendix 1 – Enhanced Leave Scheme Scheme

1

Enhanced Annual Leave Scheme

DRAFT OCTOBER 2016

2

CONTENTS PAGE

1. INTRODUCTION 3

2. SCOPE OF THE ENHANCED LEAVE SCHEME 3

3. DEFINITIONS 3

4. GENERAL PRINCIPLES 3

5. ATTENDANCE FOR BUYING ANNUAL LEAVE 4

6. BUYING ANNUAL LEAVE AND HOW IT IS CALCULATED 4

7. PENSION 5

6. REVIEW 5

APPENDICES

APPENDIX 1 APPLICATION FORM

APPENDIX 2 NOTES FOR COMPLETION

3

1. INTRODUCTION

1.1 As part of the Council’s commitment to flexible working, this scheme allows employees the opportunity to supplement their existing annual leave entitlement. The Council recognises the growing demands placed on employees to try to achieve a work-life balance and by allowing flexibility in working arrangements, can assist with accommodating individual circumstances in line with the needs of the service.

2. SCOPE OF THE ENHANCED LEAVE SCHEME

2.1 This scheme applies to all employees of East Ayrshire Council with the exception of teachers and term time employees. Whilst term time working is accessible by all East Ayrshire Council employees as a means of flexible working, the nature of term time working is such that all leave must be restricted to school holiday periods.

3. DEFINITIONS

3.1 The scheme allows employees to buy annual leave through the purchase of additional hours to increase their leave entitlement. Many employees, especially those on basic annual leave entitlement, could choose to enhance their existing entitlement by buying and using them throughout the leave year.

3.2 The leave that can be bought is in blocks of a week to a maximum of 2 weeks, i.e. 2

x the equivalent of an employee’s contractual hours, e.g. 35 or 37 hours for full time

employees, pro-rata for part-time employees.

4. GENERAL PRINCIPLES

4.1 The general criteria for being able to apply for enhanced leave include the following:

Applications for enhanced leave must be made to line managers no later than the end of January each year, for that current leave year.

Applications must be made on the application form attached as Appendix 1 and should include the amount of leave to be bought.

All approvals for enhanced leave under the terms of the scheme are subject to the needs of the service and will be considered by the appropriate manager within 14 days of receiving the request.

Managers should take into account other leave requests submitted from employees, the number of periods of enhanced leave already taken by the employee and any service need requirements.

Approved enhanced leave should be used before annual leave.

4

Where an employee withdraws from participating during a leave year, they will be entitled to take pro-rata additional leave that has already been purchased, and this leave must be taken during the leave year to which it relates. There will be no refund for leave already purchased which the employee has not used at the time of withdrawing from the scheme. At the date of withdrawal, the agreement will cease and payments for enhanced leave taken will be deducted from the employee’s pay.

Where necessary, recalculations will be made to take into account any subsequent changes such as salary or work pattern.

Normal rules will apply for annual leave for those who terminate their employment.

Employees with fixed work requirements, excluding term time employees, are able to buy leave, subject to the needs of the service, which can be used at times agreed with their line manager.

Applications will not be considered whereby there will be an additional cost to the service to provide cover.

Where an employee is offered a new post, the employee and the new line manager must discuss prior to appointment, any existing enhanced leave arrangements.

Where the manager is unable to grant the request the employee has the right of appeal. Any appeal should be made in writing to the Head of Human Resources within 14 days of notification of the decision. The Head of Human Resources, or other nominated Officer, will hear the appeal and respond within 14 days. The procedure will end at that stage and there will be no further right of appeal.

5. ATTENDANCE FOR BUYING ANNUAL LEAVE

5.1 Employees participating in the scheme are expected to demonstrate a good level of

attendance. Managers are expected to review each case on an individual basis and

take into consideration previous records of attendance and the reasons for any

absence(s). For example, a manager may authorise an application from an

employee whose attendance has fallen due to treatment for a medical condition, and

who in previous years has demonstrated a good level of attendance.

5.2 Employees on maternity leave are able to participate fully in the scheme. Periods of

maternity leave do not count as non-attendance.

5.3 Employees who enter the scheme and subsequently fail to achieve an acceptable

attendance record will have their case reviewed. Depending on the circumstances of

the case, an employee’s participation in future years may be withdrawn.

6. BUYING ANNUAL LEAVE AND HOW IT IS CALCULATED

5

6.1 Payroll will make deductions direct from an employee’s salary over the leave year

(unless the employee opts to pay in a one off payment in their next available salary).

Payments may be adjusted in line with any changes in salary e.g. pay award.

6.2 The deductions taken from an employee’s salary, over the leave year, are calculated

as follows:

Number of hours requested x hourly rate

6.3 Employees must assess the impact of deductions on their salary before making an

application to buy leave.

6.4 When buying annual leave, the maximum number of hours that can be purchased

cannot exceed an employee’s normal contracted working hours.

6.5 Working Examples (based on 2016 pay scales):

Employee 1

Grade 3, Spinal Point 12, 35 hours per week, paid 4 weekly

Weekly Salary - £318.50

Request to buy 1 week additional annual leave = £318.50

£318.50/13 = £24.50 to be deducted from each 4 weekly salary

Employee 2

Grade 10, Spinal Point 40, 35 hours per week, paid 4 weekly

Weekly Salary - £650.30

Request to buy 2 weeks additional annual leave - £1,300.60

£1,300.60/13 = £100.05 to be deducted from each 4 weekly salary

Employee 3

Grade 5, Spinal Point 20, 17.5 hours per week, paid 4 weekly

Weekly Salary - £182.00

Request to buy 1 week additional annual leave - £182.00

£182.00/13 = £14.00 to be deducted from each 4 weekly salary

7. PENSION

7.1 Any deductions of buying additional annual leave will be non-pensionable unless

employees decide to pay the contributions this option will be provided on the

application for enhanced leave. Employees should note they have up to 30 days

to buy back pension contributions. If they take this option then they are

required to pay one third and the Council would have to pay two thirds of the

total cost.

6

8. REVIEW

8.1 The Enhanced Leave scheme and Procedures will be subject to an annual desktop

review to assess whether a more detailed review is required. The desktop review will

take account of operational experience or impending legislative changes. Otherwise,

the Enhanced Leave scheme and Procedures will have a full scheduled review on

the three year anniversary of the date of approval by Cabinet.

APPENDIX 1

7

SCHEME OF ENHANCED LEAVE – APPLICATION FORM

Before completing this form, please refer to the Notes of Guidance (Appendix 2).

1. EMPLOYEE/POST DETAILS - To be completed by the employee.

Name: Employee Number:

Job Title: Service:

Work Location: Contracted Weekly Hours:

Email Address:

Do you have more than 1 contract with the

Council? Yes No

If yes please complete a separate form for

each post.

I confirm that I have read and understand the Council’s guidance on Enhanced Leave and I agree that effective from my first available salary date, my salary will be reduced and I will be provided with an additional annual leave entitlement as detailed above. I agree that this arrangement will continue for a period of 12 months and that I can only amend this agreement before the end of that period if I experience a lifestyle event. If I leave the Council or my contract is terminated before the end of the 12 month salary period, I understand that I will need to pay any outstanding balance from my final salary and use any additional annual leave before my employment with the Council has ended. Any deductions for buying additional annual leave will be non-pensionable unless you decide to pay these contributions, please indicate below if you wish/do not wish to pay the pension contributions for the period of your additional annual leave: I wish to pay Pension Contributions I do not wish to pay Pension Contributions

If you wish to pay Pension Contributions you will be required to pay one third and the

Council would have to pay two thirds of the total cost.

Signature:

Date:

2. BUYING LEAVE

Please state the number of weeks leave you wish to buy: (Please note this cannot exceed 2 x your contracted weekly hours)

8

Please state how you wish to have the leave deducted:

One off payment Equal instalments over 1 year

3. EMPLOYEES AUTHORISATION FOR DEDUCTIONS FROM PAY

I have read and understood the conditions of the scheme of enhanced leave and authorise the Council to deduct the appropriate sums of money from my pay, each period. I understand that if my pay changes, the amount of money deducted from my pay will be amended accordingly.

EMPLOYEE - SIGNATURE: _________________________________________________

EMPLOYEE – PRINT NAME: __________________________ DATE: ______________

4. AUTHORISATION FOR ENHANCED LEAVE- completed by the employee’s line manager

Enhanced Leave Application:

Approved Not Approved

If not approved, please provide the reason:

4. COVER ARRANGEMENTS – completed by the employee’s line manager

Is there a requirement to cover the period of approved additional leave?

Yes No

If yes, please indicate the type of cover, for example overtime, bank etc.

LINE MANAGER – SIGNATURE: _____________________________________________

LINE MANAGER – PRINT NAME: _______________________ DATE: ______________

All completed forms should be returned to Human Resources, Opera House, 8 John Finnie Street, Kilmarnock, KA1 1DD by 31 January. Forms received after this date will not be processed.

9

APPENDIX 2

SCHEME OF ENHANCED LEAVE

Notes for Completion

Please ensure you read these notes carefully before completing the application form.

1. PERSONAL DETAILS

Please ensure that ALL details are completed i.e. your full name, employee number, job title, service, work location, weekly contractual hours and your chosen correspondence address. Please note that you will find your employee number detailed on your pay slip.

2. BUYING LEAVE

You must clearly state the number of weeks you wish to buy. The maximum amount of

leave you can buy can be no greater than 2 x your weekly contractual hours. Please note

that you cannot carry forward the bought leave into the next leave year.

3. DEDUCTIONS FROM PAY

You must sign the form to authorise payroll to make deductions from your pay. If this form is not signed, it will automatically be returned for you to sign which may cause a delay in the commencement of payroll deductions.

4. MANAGERS AUTHORISATION

Your manager must approve or reject the application for enhanced leave. The form must be signed and dated by your line manager.

5. HUMAN RESOURCES

It is the responsibility of your line manager to ensure this form is forwarded to Human Resources. Human Resources will make arrangements for a copy of this form to be retained in your personal file, and for payroll to make the appropriate deductions from your pay.

Note:

Please print clearly and use black ink to complete the form.

If you require assistance in completing this form, please contact your Human Resources section.

Before completing this form, please ensure you have read and understood the Scheme of Enhanced Leave.