Appendix A8.6
Over or under-taken annual leave on termination of service
1. Cash compensation for untaken annual leave on termination of service
You will be paid for any part of the statutory minimum allowance to which you are entitled up to the date of termination of service (calculated on a pro-rata basis) but which is untaken on that date. Beyond this, payment for any untaken annual leave will only be considered in the following circumstances:
1.1 Last day of service known well in advance
Where the last day of service is known well in advance (e.g., as it is with age retirement, redundancy or fixed term appointments) payment is made only for annual leave which you are specifically prevented from taking by management.
1.2 Resignation or voluntary retirement
Any outstanding leave will not be converted into a cash payment unless management have specifically prevented you from taking it.
If you leave BBSRC employment before you have had the opportunity to take your annual leave entitlement due to sickness, cash compensation is allowed for untaken leave. This will be calculated as pro-rata untaken leave according to the appropriate entitlement during a period of paid or unpaid sick absence, (see section A8, paragraph 4 for the effect of absence on entitlement to annual leave).
1.4 The employee is medically retired
If you are medically retired whilst on sick leave, cash compensation is allowed for the amount of leave untaken, subject to the rules on carry-over (see section A8 paragraph 6.4) and entitlement (see section A8 paragraph 4) if you have been absent during the leave year.
Please refer to the JSS website (
jsspensions.nerc.ac.uk
) for guidance on medical retirement.
1.5 The employee dies in service
After the application of any deductions, payment is made in full for all leave untaken at the date of death in service.
Employees must not deliberately accumulate annual leave with the sole intention of converting it into a cash payment.
Employees dismissed for misconduct will not receive payment for untaken contractual annual leave. Where suspension on full pay pending investigation of misconduct has preceded dismissal, that period will not qualify for contractual annual leave.
2. Cash repayment of over-taken annual leave
If you have exceeded your entitlement to annual leave allowance by the date of termination you are required to refund from salary an amount equivalent to the excess number of days. When death occurs in employment, recovery is waived. Recovery will also be waived when an excess on termination of service is caused purely by action taken by management - e.g. when an employee is made redundant.
3. Calculation of cash value of untaken or over-taken annual leave
Payment for untaken or over-taken annual leave will be calculated by reference to the average number of working days in a year. This figure will be 222 days, (pro-rata for part time working).
Payments for untaken annual leave are subject to the normal statutory deductions but does not count for superannuation/pension scheme contribution purposes.
4. Superannuation and cash compensation/repayments
Cash compensation - Where an employee on leaving service is given a cash compensation payment in lieu of untaken leave, the payment will not be regarded as a pensionable emolument and service will reckon only up to the last day of service for pension/superannuation scheme purposes.
Cash repayment - Similarly, a repayment of excess annual leave will not affect the rate of pensionable pay, and reckonable service is determined up to the last day of service with no adjustment being made in respect of the period of excess leave to which the repayment relates.
Last updated 18/11/10
Amendment 111 - November 2010