Cashing up annual leave - some things you may not know

Employees can make a request to employers to cash in annual holidays, opting instead to take a lump sum payment rather than time away from work, but there are a few rules that need to be taken into consideration.

The request must come from the employee and not the employer.  Although the employee is entitled to leave, the employer can decline the request at its own discretion and does not need to give a reason for its decision.  However, the fact that employers owe a duty of good faith to their employees suggests that an employer's response to a request should be reasonable.

In addition, there is a limit to the amount of leave that can be converted to payment.  By law, the employee can only exchange a maximum of one week annual leave for cash payment per annum.

An employer is entitled to have a policy that it will not consider requests from employees in its business or in a particular section of its business.

If you have any questions about annual leave or employee entitlements, please give Vanessa a call on 03 578 3386 or email her on vanessa@tva.co.nz