4 Oct 2021

Untaken leave in lockdown risking burnout and balance sheets

11:19 am on 4 October 2021

As the borders stay shut and lockdowns go on, companies that are already dealing with losses are facing another problem - growing leave balances for staff.

tired businesswoman

Photo: 123RF

Untaken leave is a liability on company balance sheets, but the concern is it will also result in burnout for staff who are not taking much-needed breaks.

Businesses are being encouraged to talk to their staff to make sure they take time off, and reminded that as a last resort, employees can be made to take paid time off.

The country's largest retailer The Warehouse Group, which owns well-known brands Noel Leeming, Warehouse Stationary and Torpedo 7, has seen a 22 percent drop in sales in the latest lockdown, and chief executive Nick Grayston said it was also dealing with the issue of annual leave balances which are creeping up.

"It's been an issue since the first lockdown and has started to build and in the interceding months when we haven't been in lockdown. We have an active policy of trying to help people to be able to take their leave.

"You know, obviously it's important from a health and safety point of view to be able to make sure that people get the right time away from the business."

Grayston said the company had been able to control the leave levels so far but when Auckland exits lockdown, it will again be encouraging people to take time out.

"We've been managing it the last couple of years and we have kept it under control but it will be building through the current lockdown. But again we'll get back to managing it when people are able to do so."

Canterbury Employers Chamber of Commerce chief executive Leeann Watson said businesses in her region were doing okay with leave balances this time around, but Auckland companies would be seeing an uptick in leave liabilities.

She said employers had to make sure staff were rested.

"What we would certainly recommend from the Canterbury Chamber's perspective is that they engage a conversation, they try and come up with a mutually agreeable plan as to how to try and ensure that the staff member is taking some leave and they've got a plan in place.

"There might be some flexibility required on that, such as if they don't want to take, you know, a couple of weeks off all at once. It might be, you know, reducing their five-day week to a four-day week over a month," she said.

Watson stressed that a mutually agreeable plan was always the best option to avoid any hiccups.

"That's what we would advise employers to work through. But recognising that businesses do have the ability to enforce leave - particularly where an employee has been a little unreasonable about not wanting to take any leave ... because employers do have that obligation from a wellbeing perspective and from a health and safety perspective."

Business advisory firm KPMG said people understandably did not want to take holidays during lockdown, but head of people, performance and culture Kerry Butler said employees should seriously consider taking a break.

"As time goes by, you know, in Auckland now we're over six weeks [in lockdown] and for a lot of people who have said 'well, what's the point of taking my annual leave while I'm at home', they're now starting to find they're pretty tired. They're needing a break anyway and they're just wanting to switch off," she said.

Butler said if an employee had more than a full year's allocation of leave (four or five weeks) by the end of summer, that was usually a sign that a conversation was needed over taking a break.

Get the RNZ app

for ad-free news and current affairs