The Institute of Payroll Professionals (IPP) is warning businesses that the severe travel disruptions caused by a volcanic ash cloud will have implications on payroll departments that have to deal with staff absenteeism due to stranded workers that cannot get back to the UK.

Since last Thursday, an erupting volcano in Iceland has grounded all flights above the UK affecting thousands of airline passengers. As the volcanic ash cloud drifts across Europe this week, many parts of the continent will continue to be a ‘no-fly’ zone.

Therefore, businesses need to prepare their payroll and HR staff to deal with an increasing number of employee absences with many Britons stuck overseas. Another possibility may be the need to cross-train other departments to help with the workloads of absent colleagues.

Mr Lindsay Melvin, Chief Executive of the IPP, said: “Many of the employees who were due to return to work last week from their Easter holidays abroad would have been affected by the volcanic ash cloud.

“Therefore, payroll departments need to take the appropriate steps to work out whether there are contractual obligations to pay employees even if they cannot come into work.

“Payroll staff also need to discuss with their employers whether the unplanned absence of stranded staff affects their annual holiday allowance or is treated as unpaid or paid leave.

“The travel chaos caused by the volcanic ash cloud does not appear to be abating and payroll and HR departments need to establish contingency plans as early as now. This serious situation will inevitably have an affect on business productivity with many employees unable to come back to work for an indefinite amount of time.”