Employee Guidance Buying and Selling Annual Leave Scheme NOTTINGHAMSHIRE HEALTHCARE NHS FOUNDATION TRUST

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1 NOTTINGHAMSHIRE HEALTHCARE NHS FOUNDATION TRUST EMPLOYEE GUIDANCE BUYING AND SELLING ANNUAL LEAVE SCHEME IN TRODUCTION All employees receive paid annual leave in accordance with their contract of employment. This scheme allows employees the flexibility to alter their annual leave entitlement (excluding Bank Holidays), by: Buying up to 37.5 hours in each leave year, or Selling up to 37.5 hours in each leave year The above hours will be pro rata for part time staff. This guidance explains how the scheme works. BUYING ANNUAL LEAVE Extra annual leave may appeal for all sorts of reasons, special holidays, time with family, etc. Appendix 1 of this document should be completed in full, signed by your Line Manager and forwarded to the Payroll Dept. 1 CONDITIONS 1.1 An assessment will be made to ensure that no deduction from pay to purchase additional leave will result in the remaining salary being under the minimum wage rate or below the National Insurance lower earnings limit for National Insurance contributions. Only employees in post as at 1 April each year will be eligible to buy leave. 1.2 The decision to approve the buying of leave rests with the Line Manager; this is the Manager with authority to approve leave. 1.3 All applications to buy leave will be considered against the following criteria: Impact on service provision Cover arrangements, including cost Impact on colleagues ISSUE 3 APRIL 2018 Page 1 of 8

2 1.4 The Trust reserves the right to refuse an employee s application to buy leave. Applications will not be unreasonably refused but the overriding consideration is the maintenance of safe and effective standards of service and within financial constraints. 1.5 Legally an employee must have 20 days annual leave (excluding Bank Holidays) per full year (pro rata for part time staff) and they cannot be paid in lieu for these days. 1.6 If an employee works on a full time basis then the maximum number of hours they can buy is 37.5 hours (pro rata for part time). 1.7 Applications should be made at least six months before the end of the financial year, ie before 30 September 2018, in order that arrangements can be put in place with payroll. 1.8 The normal rules regarding carry over of annual leave into the next leave year apply, as per the Trust s Annual Leave Policy. Employees who have purchased additional annual leave and then do not use it cannot sell the leave or carry it over, ie an employee cannot buy and sell annual leave in the same year. 1.9 All salary payments and deductions must be completed within the current leave year If permission is granted for an employee to buy up to an additional 37.5 hours leave, the cost of the unpaid hours should be deducted from their salary over the remaining months of the financial year (or leave year for Medical and Dental employees) Members of the NHS Pension Scheme who participate in the buying of annual leave will have the cash value of the annual leave treated on a non-pensionable basis; this case value will not be included in the calculation of scheme contributions for the relevant pay period. This ensures that a scheme member will not accrue any more or any less in terms of NHS Pension benefits than they would have done, had they not varied their leave entitlement If an employee changes their hours of work, the Payroll Department will need to be contacted, as adjustment may be required to the payment, dependent on leave that s been taken or not. If the leave has not been taken, then the requested hours may be reduced to ensure this does not take the employee below the national minimum wage rate Pay will be adjusted over the leave year by making monthly deductions for bought leave. As this arrangement reduces pay, this may affect other salary-related calculations such as SSP, maternity pay, etc. ISSUE 3 APRIL 2018 Page 2 of 8

3 2 PROCESS 2.1 An employee who wishes to buy additional leave entitlement must apply by completing the Leave Purchase Application Form by 30 September (Appendix 1) and returning it to their Line Manager for approval and signature. If the request is approved, a signed copy of the form should be sent to the Payroll Department who will make salary calculations of the reductions to the employee s pay. Once processed, a copy of this form will be retained in the employee s HR file. 2.2 When applying for additional leave the employee must indicate the proposed dates they intend to take their additional leave, as part of the leave planning process for the year. Your form will not be processed if these dates are missing. 2.3 Where an application for additional leave has been received and approved, the employee will be notified in writing by the Payroll Department of the appropriate reduction to their salary. The employee will be given 2 weeks to confirm in writing that they wish to go ahead. If the employee fails to return the signed confirmation to the Payroll Department within the 2 weeks, the application for additional leave will be cancelled and the Line Manager informed. 3 TIMELINE 3.1 It is important to note that forms requesting the purchasing of additional leave will only be processed by the Payroll Dept. if received between: 1 APRIL 30 SEPTEMBER (Each Leave Year) Any forms received outside of this timeframe will not be processed. SELLING ANNUAL LEAVE 4.1 Employees may wish to use less than their full leave entitlement and this scheme gives them the opportunity to exchange some of their leave for additional salary. 4.2 Appendix 2 of this document should be completed in full, signed by your Line Manager and forwarded to the Payroll Dept. 4 CONDITIONS 4.1 Only employees in post as at 1 April each year will be eligible to sell leave. 4.2 The decision to approve the selling of leave rests with the Line Manager. This needs to be the Manager with authority to approve leave. ISSUE 3 APRIL 2018 Page 3 of 8

4 4.3 Legally an employee must have 20 days annual leave (excluding Bank Holidays) per full year (pro rata for part time staff) and they cannot be paid in lieu for these days. 4.4 If an employee works on a full time basis then the maximum number of hours they can sell is 37.5 hours (pro rata for part time). Part time employees must ensure they retain enough annual leave to cover Bank Holidays. 4.5 Applications should be made at least six months before the end of the financial year, ie before 30 September, in order that arrangements can be put in place with payroll. 4.6 Employees who have sold annual leave and then find towards the end of the financial year that they need additional leave, cannot buy back the leave they have already sold, ie an employee cannot sell and buy annual leave in the same year. 4.7 All salary payments and deductions must be completed within the current leave year. 4.8 If permission is granted for a member of staff to sell up to 37.5 hours leave (pro rata), the money will be paid to them in the following month s pay after receipt by Payroll, as long as the paperwork has been completed in good time. This will be calculated at basic pay including regularly paid supplements. 4.9 Members of the NHS Pension Scheme who participate in the selling of annual leave will have the cash value of the annual leave treated on a non-pensionable basis; this case value will not be included in the calculation of scheme contributions for the relevant pay period. This ensures that a scheme member will not accrue any more or any less in terms of NHS Pension benefits than they would have done had they not varied their leave entitlement. 5 PROCESS 5.1 An employee who wishes to sell annual leave must apply by completing the Request To Sell Annual Leave Form (Appendix 2) 5.2 When an application to sell leave has been received and approved, the employee will be notified in writing by the Payroll Department. 6 TIMELINE 6.1 It is important to note that forms requesting the selling of annual leave will only be processed by the Payroll Dept. if received between: 1 APRIL 30 SEPTEMBER (Each Leave Year) Any forms received outside of this timeframe will not be processed. ISSUE 3 APRIL 2018 Page 4 of 8

5 REQUEST TO PURCHASE ADDITIONAL ANNUAL LEAVE Employee to complete: APPENDIX 1 Name*: (Please Print) Employee Number*: - Ward/Department*: Job Title*: In accordance with the Trust s Buying and Selling of Leave Guidance and Annual Leave Scheme, I would like to purchase... * hours of additional leave. I wish to take this additional leave on the following dates from:... * to... * I understand that if I opt to buy additional entitlement, this will result in a reduction in my salary for a period of up to 12 months following approval of my application. I understand that the decision to allow me to buy leave is entirely at the Trust s discretion and applies only for the leave year in which the application is made. If I leave the Trust before having paid back all monies owed, I agree to repay any overpayment I have received in my final salary. Employee s signature*:... * Date*:... Approved by: (Employee s Line Manager) I confirm that all practical considerations have been fully considered Name*:... (Please Print) Job Title*:... Signature*:... Date*:... Manager: Send the original form to Payroll Services Provide the employee with a copy * Please complete all of these fields before sending the form to Payroll Services PLEASE NOTE: Completed forms for buying annual leave will only be accepted and processed by the Payroll Dept., if received between 1 April and 30 September. ISSUE 3 APRIL 2018 Page 5 of 8

6 APPENDIX 2 REQUEST TO SELL ANNUAL LEAVE Employee to complete: Name*: (Please Print) Employee Number*: - Ward/Department*: Job Title*: In accordance with the Trust s Buying and Selling of Leave Guidance and Annual Leave Scheme, I would like to request to sell... * hours of additional leave for the financial year 1 April... * to 31 March... * I understand that any adjustment in pay will be made in the month following this request being granted and the number of hours will be deducted from my annual leave entitlement by my Line Manager. Employee s signature*:... * Date*:... Approved by: (Employee s Line Manager) Name*:... (Please Print) Job Title*:... Signature*:... Date*:... Manager: Send the original form to Payroll Services Provide the employee with a copy * Please complete all of these fields before sending the form to Payroll Services. PLEASE NOTE: Completed forms for selling annual leave will only be accepted and processed by the Payroll Dept., if received between 1 April and 30 September. ISSUE 3 APRIL 2018 Page 6 of 8

7 BUYING ANNUAL LEAVE 1 APRIL TO 30 SEPTEMBER ONLY 2-WEEK DEADLINE Employee Complete Annual Leave Purchase Application Form; Must indicate proposed dates. Send to Line Manager for Approval Must Sign to Confirm Consent to Reduction in Salary (Retain a copy for their own records) Confirmed Reduction in Salary for a Period of up to 12 Months Following Approval of Application If Leave the Trust Before Paying Back All Monies Owed Already Agreed to Repay any Underpayment in Final Salary Notify Application has been Cancelled Buying Annual Leave Line Manager If Approved, Send to Payroll Dept for Processing Line Manager to Increase Annual Leave Entitlement in ESR Authorised Copy for Line Manager s Records Notify Application has been Cancelled Payroll Dept Undertake Salary Calculations and Reductions to Employee s Pay Send Confirmation Letter of Leave Purchase Salary & Employee Consent Form Signed Consent to Reduction in Salary Received within Timeframe Signed Consent Not Received within 2-Week Timeframe APPLICATION CANCELLED HR Dept Authorised Copy for Employee s HR File ISSUE 3 APRIL 2018 Page 7 of 8

8 SELLING ANNUAL LEAVE 1 APRIL TO 30 SEPTEMBER ONLY Employee Complete Request to Sell Annual Leave Application Form Send to Line Manager for Approval Receive Confirmation Letter of Annual Leave Sale Receive Adjustment in Pay in Following Month Buying Annual Leave Line Manager If Approved, Send to Payroll Dept for Processing Authorised Copy for Line Manager s Records Line Manager to Reduce Annual Leave Entitlement in ESR Payroll Dept Undertake Salary Calculations and One-off Payment to Employee s Pay Send Confirmation Letter of Annual Leave Sale HR Dept Authorised Copy for Employee s HR File ISSUE 3 APRIL 2018 Page 8 of 8