Agenda Item No
The Vale of Glamorgan Council
Cabinet Meeting: 23 March, 2015
Report of the Leader
Annual leave purchase scheme
Purpose of the Report
1. To ask Cabinet to consider and endorse the proposed annual leave purchase scheme.
1. That Cabinet note and approve the implementation of the proposed annual leave purchase scheme (Appendix A) on an initial trial basis of one year.
2. That an interim report outlining a review of the trial be brought to Cabinet in December 2015 following implementation of the scheme.
3. That delegated authority be given to the Head of HR to develop appropriate guidance on the implementation of the scheme.
Reasons for the Recommendations
1. To help contribute to current savings targets across all service areas and increase flexibility for both the Council's Services as well as employees.
2. To provide Members with the opportunity to review the response to the scheme and to consider recommendations on whether the scheme should continue on a more permanent basis.
3. To support employees and managers with the application of the scheme.
2. Members will be aware that discussions have been progressing with the trade unions to explore options to respond to the continuing budget challenges faced by the Council. The annual leave purchase scheme is one element of an overall framework agreement reached with the recognised trade unions as set out in the report of the 17 November 2014.
3. The annual leave purchase scheme will enable employees to voluntarily increase their annual leave allowance by buying additional leave (subject to certain conditions). The main advantages will be in offering a flexible, employee benefit which will provide financial savings to the Council.
4. The guidance sets out the eligibility criteria for employees to be able to submit an application to purchase additional leave.
5. The scheme will contribute towards achieving savings through a reduction in salary costs, contributions for National Insurance and possibly a reduction in pension contributions where the employee is member of the pension scheme. As the employee’s salary is reduced over the 12 month period, the amount of tax and national insurance they will pay will also be reduced.
Relevant Issues and Options
6. The draft scheme will enable employees to request to purchase either 5 or 10 days additional annual leave each year. Part time staff will be eligible to purchase a pro rata entitlement based on their contracted hours. Additional purchased leave will be added to the employees existing annual leave entitlement and will be accounted for before any other contracted annual leave.
7. Applications to purchase 5 days annual leave (pro rata for part-time employees) will automatically be approved. Requests to purchase an additional 5 days annual leave (10 additional days in total, pro rata for part-time employees), will be for consideration by the employing manager depending on the requirements of the job and the operational needs of the Service.
8. If a request to purchase annual leave is turned down, the employee may appeal the decision to their line manager. This appeal will be considered by their Chief Officer (Head of Service/Operational Manager) not previously involved in the initial decision. The outcome of the appeal will be given in writing and a copy of the appeal decision sent to the Head of Human Resources. There shall be no further right of appeal.
9. As a condition of the scheme, the employee will be required to agree to deductions to be made from their salary in equal monthly instalments. The value of the deductions will remain the same over the period regardless of any changes to pay or contractual arrangements.
10. Once an application is approved, it is a binding agreement between the Council and the employee. It is not possible to rescind leave or to reimburse salary/wages in circumstances where leave has been purchased and deductions progressed.
11. Employees with a birthday leave year will be required to change to an annual leave year from 01 April to 31 March to take advantage of this scheme. This is necessary to comply with Local Government Pension Scheme (2014) regulations which stipulate that the payment and repayment of any deductions from pay must all be completed within the same financial year. The appropriate pro rata of annual leave entitlement will be calculated to facilitate this change.
12. All other conditions in relation to annual leave, for example requesting when to take annual leave and carrying over annual leave, will remain the same.
13. Where an employee is a member of the Local Government Pension Scheme (LGPS), they can choose to ‘buy back’ any lost pension contributions through Additional Pension Contributions (APC).
14. The scheme will be supported with appropriate guidance for both managers and employees.
15. Members are asked to consider and approve this proposal to enable the scheme to be launched as close to the start of the annual leave year as possible. Although the application process would normally be in January and February, it should be noted that this will begin later in the year for the trial period, depending on the date of launch.
16. The buying and repayment of any purchased annual leave must be completed by the end of the financial year. This may mean that if the scheme is launched in April and repayments start in July, the payback period will be over nine equal monthly instalments.
Resource Implications (Financial and Employment)
17. It is anticipated that there will be financial savings from the proposed annual leave purchase scheme, although it is difficult to anticipate how popular the scheme will be and the scale of the savings that could result. The main advantages will be in offering a flexible, employee benefit which may also provide financial savings to the Council.
18. The opportunity to purchase additional annual leave may have resource implications on the ability for service areas to ensure a continued provision of a high quality service. Applications to purchase 10 days additional annual leave will only be accepted where service provision will not be adversely affected. It will remain the responsibility of supervisors to manage and accommodate the application and use of annual leave to ensure the continuity of service delivery.
Sustainability and Climate Change Implications
19. There are no sustainability or climate change implications directly arising from this report.
Legal Implications (to Include Human Rights Implications)
20. There are no legal implications directly arising from this report.
Crime and Disorder Implications
21. There are no crime and disorder implications directly arising from this report.
Equal Opportunities Implications (to include Welsh Language issues)
22. The proposals for the annual leave purchase scheme as attached in Appendix A have been subject to an equality impact assessment which shows a positive impact for employees.
23. The scheme seeks to support the delivery of service objectives set out in the Corporate Plan 2013/17 and individual service plans by offering flexible employee benefits and engaging with a committed workforce.
Policy Framework and Budget
24. This report is a matter for the Executive decision.
Consultation (including Ward Member Consultation)
25. The Trade Unions have been consulted on the proposed annual leave purchase scheme and support the scheme being launched.
Relevant Scrutiny Committee
26. Corporate Resources
Appendix A - Annual leave purchase scheme
Adrian Unsworth, Operational Manager Human Resources
Corporate Management Team
Siân Davies, Managing Director