The minimum amount of holiday that an employer must give to employees was increased on 1 October 2007 when the Working Time (Amendment) Regulations 2007 finally became law. Previously, employees were entitled to a minimum of 20 days paid holiday each year. As of last October, though, this statutory minimum has been increased to 24 days paid holiday per annum. From 1 April next year, that entitlement rises to 28 days.
These changes are designed such that employees might realise the benefit of the eight days of public holiday to which there was previously no statutory entitlement.
The additional leave entitlement of four days can be replaced with a payment in lieu until 1 April 2009, but thereafter it cannot (except for in the circumstances of a termination of contrac). However, it’s possible for employers to agree with their employees that the additional leave entitlement may be carried forward into the next holiday year.
It’s important to note that there’s no requirement to increase holiday entitlement where workers are already entitled to at least 28 days’ holiday prior to 1 October 2007.
Employers can use the Department for Business Enterprise and Regulatory Reform’s (DBERR) ‘Ready Reckoner’ to help them calculate an employee’s new holiday entitlement where the employer’s holiday year doesn’t start on 1 October. This ‘Ready Reckoner’ can be found on the Internet at the DTI website
Setting out holiday rights
An employer should set out in writing the arrangements relating to holiday when an employee starts work. These arrangements are usually laid down in the Contract of Employment or a statement of Terms and Conditions of Employment (which should be given to an employee within two months of them commencing work).
Details of the employer’s holiday year, the amount of holiday entitlement and the amount of holiday pay should all be provided. Sufficient details ought to be supplied to enable an employee’s entitlement to be precisely calculated (including a given worker’s entitlement to accrued holiday pay on termination of employment).
An employer is allowed to specify the dates of its holiday year. For example, the holiday year can run alongside the calendar year, or it may run from, say, April to March. If an employer doesn’t state the holiday year, then an employee’s leave entitlement is calculated either from the date on which they started working for the company or – for those employees already employed on or before October 1998 – from 1 October (being the anniversary of the Working Time Regulations that came into force on that date).
Although the recent statutory changes to holiday entitlement are designed to allow employees to benefit from the eight Bank Holidays, there’s no entitlement for taking holiday on these specific days.
Depending on the nature of the work in question, and any holiday rules that the employer might have put in place, an employee may well be required to work on Bank Holidays.
Applying for (and taking) leave
In the first year of employment, employers are entitled to use an accrual system for their employees whereby they total up how much leave an employee has built up during their initial 12 months of ‘engagement’. This leave is then built up monthly in advance at the rate of one twelfth of the annual entitlement.
For instance, an employee in the eighth month of his or her employment would have accumulated 16 days’ leave, based on the annual entitlement of 24 days (24 x 8/12ths = 16). When the holiday entitlement increases to 28 days on 1 April 2009, the employee will then be entitled to an allocation of 18.6 days’ leave in their eighth month.
Recent case law has established that accrued holiday should be calculated on the basis of the actual days worked in a given year rather than the calendar year of 365 days.
Before 1 October 2007, employers were required to ’round up’ fractional days that employees had built up. This occurred when an employee requested leave but, by way of example, had only accrued 0.3 days. The employer would generally round this up to the nearest half-day. There’s no longer any requirement to do so, and it’s at the discretion of the employer whether or not they round up fractional days.
From 1 October 2007, employees have been allowed to carry over into the next holiday year any holiday entitlement over four weeks (20 days for a five-day week, 16 days for a four-day week, etc). However, there’s no statutory entitlement for this – it must be agreed between the employer and employee. As previously stated, up until 1 April 2009, all employers have the option to temporarily pay employees in lieu of the additional days. After 1 April 2009, however, employees cannot be paid in lieu for days not taken or carried over.
Employees must give notice to their employers if they wish to take holiday. This notice must be twice as long as the period of leave requested. The employer is entitled to refuse permission by giving counter notice at least as long as the leave requested. For example, an employee has to give two weeks’ notice for one week’s leave, and the employer can give counter notice of its refusal one week before the employee is due to take their leave.
Restrictions on taking leave
Employers may elect to specify particular dates as ‘days of closure’ when employees are expected to take annual leave, or they can determine the maximum amounts of leave that may be taken on any one occasion (and when that leave is going to be acceptable).
Any such restrictions must either be expressly stated in the Contract of Employment, implied from custom and practice or incorporated into individual contracts from a collective agreement between the employer and the Trade Unions.
In the case involving Sumison versus BBC Scotland [2007], it was held that the BBC was allowed to require Mr Sumison – their employee – to take any leave on a Saturday. The Tribunal decided that Saturdays were not “non-working days”, as Mr Sumison had tried to argue, so leave taken on a Saturday was of the same value as leave taken on other days.
In that case, it was also decided that employers were well within their rights to require employees to take single days as holiday, and that they could stipulate when leave might be taken (provided it’s on a day that the employee is contracted to work).
Holiday pay and the law
The calculation of holiday pay entitlements varies according to workers employed on a ‘normal’ basis, those who work shifts and individuals who don’t actually work what may be construed as ‘normal’ hours.
If an employee’s salary doesn’t vary with the amount of work carried out, then for each week of statutory leave entitlement, he or she is entitled to a week’s pay. Pay for non-contractual overtime isn’t included here. If an employee’s pay does vary with the amount of work carried out, then the amount of a week’s pay is the pay for the normal weekly working hours multiplied by the employee’s average hourly rate over the preceding 12 weeks.
Overtime hours may be included in this, although pay for these hours should be adjusted to the normal rate. Any week in which no pay was due, for hours worked, should be replaced by the last previous week in which pay was received for hours worked. For shift workers, their average weekly hours of work in the preceding 12 weeks are multiplied by their average hourly rate (calculated as above, and which can include any shift allowance payable).
If there are no normal working hours, a week’s pay is the average pay received over the preceding 12 weeks. Any week for which no pay was due should be replaced by the last previous week for which pay was due.
Part-time employees are entitled to the same holidays as full-timers on a pro-rata basis. For instance, an employee who works three days per week is entitled to 14.4 days’ holiday per year (their normal working week and the standard 24 days pro-rated).
Holiday pay and the law
The case of McMenemy versus Capita Business Services [2007] decided that where a part-time employee didn’t ordinarily work on a Monday, they’re not entitled to a day off in lieu to reflect a missed Bank Holiday.
No-one has a statutory entitlement to paid leave for public holidays. It depends on what’s stated in the Contract of Employment.
Some employers may give part-time employees a pro-rata entitlement of days off in lieu according to the number of hours they work. However, they’re not under any obligation to do so. Mr McMenemy attempted to argue that he’d received less favourable treatment than his full-time colleagues, but the Tribunal didn’t find that to be the case.
It was possible that a full-time worker worked from Tuesday to Saturday and so didn’t work on Mondays. In addition, that employee wouldn’t have been entitled to a day off in lieu of a missed Bank Holiday on a Monday.
