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Comments from ACCA September 2006

I write to convey the comments of the Association of Chartered Certified Accountants (ACCA) on the above consultation. ACCA represents over 50,000 professional accountants in the UK and the majority of these either work in small businesses or are in public practice providing business services to small businesses.

We appreciate that the central element of the proposal, viz to introduce an additional eight days statutory leave entitlement so as to ensure that bank holiday absences are not treated as part of annual leave, is a reform to which the Government is politically committed. We do not contest the basic policy objective behind the proposal, viz to ensure that employers do not try to undermine the spirit of the statutory leave rule and thereby put their workers at a comparative disadvantage. In our experience most good employers currently offer the statutory leave entitlement over and above bank holidays, and where sectoral requirements dictate that staff must work on bank holidays, additional days off in lieu are offered.

We would also agree with the suggestion in the paper that the employees which are currently most likely to be required to take bank holiday absences out of their annual leave are those at the lower end of the pay scale: if this is indeed the case, then the Government is entitled to intervene on the ground of fair treatment of workers.

Our only concern over the mechanics of implementing the proposed change is that costs and administrative burdens are kept to the minimum. The aspect where we suspect this could become an issue is the proposal that staff should be entitled by law to carry forward any unused portion of the additional eight day period of leave. This could lead to individual members of staff having 36 days leave entitlement in the following year: this could have a negative impact on employers’ personnel and work planning and give rise to particular problems in dealing with staff requests to take extended leave at inconvenient times of the year. We suspect that the great majority of employers would opt to provide in contracts of employment that any such entitlement should not apply. But we feel that a better solution would be to leave any decision on carry-forward rights entirely to individual employers, without any presumption in the law that they should adopt any particular practice on the matter.

With regard to the issue of giving employees the option of commuting their ‘additional’ eight days leave to cash, we are aware that this practice is already followed by some employers with apparent success. But employers who do this are likely to be larger employers with greater administrative resources. We do not believe that a practice which appears to be successful in the larger business scenario should be seen as the template for what is practicable and desirable for all employers. While we accept therefore that commutation of leave can work successfully in some environments, we do not believe that an across-the-board legal right to do this should be introduced. Rather, the decision should be left to the individual workplace.

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