From 1 April 2011, employees may request to cash up one week of their annual leave. An employer doesn’t have to agree.
One week can be cashed-up for each ‘entitlement year’. An ‘entitlement year’ starts on the anniversary of the employee’s start date.
The employee cannot make their first cash-up request until the start of their next entitlement year, after 1 April 2011. So, if an employee’s anniversary is on 26 February, they will not be able to request cashing-up until 26 February 2012.
The main thing to remember about cashing-up is that it is an option available to the employee if the employee sees cashing-up as a benefit for them, and if the employer agrees. Cashing-up was not designed to benefit the employer – any benefit for the employer is purely coincidental.
An employer cannot make cashing-up a term of an employment agreement.
An employer cannot even raise cashing-up in negotiations relating to wages.
The employee must make their request in writing.
The employer must consider the request within a reasonable time and reply in writing.
The rate of payment is the greater of:
• Ordinary weekly pay or
• Average weekly earnings for the last twelve months
If the above rules are not followed, then any cash-up payment will be treated as if it had not been paid.
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