EMPLOYEES AND WORKERS
REGULARLY rank their entitlement
to annual leave as one of the most
important benefits they receive from
their employer.
Many spend a significant amount
of time planning what they will do
during their annual leave – whether
that involves taking time off for a
honeymoon, or just time spent with
friends and
family. From
an employer’s
perspective,
however,
dealing with
an employee’s
right to annual
leave can cause
problems.
There are a number of issues, often
of a technical nature for employers
to be aware of, and this is an area of
employment law that is subject to
regular change.
Employees are entitled to 5.6 weeks’
annual leave per year which amounts
to 28 days per year for those who work five days a week, says Mark Stevens, a
solicitor at Veale Wasbrough Vizards.
“A part-time worker is also entitled to
28 days’ holiday per year, but reduced
pro rata according to the number of
days they work each week.”
He illustrates this with an example
where someone working three days a
week will receive three-fifths of 5.6
weeks’ leave, which works out as 17
days. Interestingly, public holidays can
count towards the worker’s entitlement
to annual leave.
Calculating the holiday entitlement
of a shift worker is more difficult,
says Stevens. Here, an employer must
calculate leave based on the average
shifts worked during the 12-week
period immediately prior to the
requested leave period.
To use an example, if an employee
always works four 12-hour shifts,
followed by four days off, then their average
working week
over that 12-
week period
works out as
three-and-a-
half shifts of
12 hours. So
5.6 weeks x 3.5
shifts means a shift worker would be entitled to 19.6
shifts’ annual leave for the holiday year,
with each shift being 12 hours.
The law only sets the minimum and
so an employer is free to offer more
than statutory holiday and the extra
holiday will be considered “contractual
holiday entitlement”.
Bank and public holidays
Contrary to popular myth, there is
no statutory right to bank or public
holidays. This is why, practically
speaking when looking at this question,
Stevens says the first thing to consider
is the contract of employment:
“If, for instance, the contract says staff are
entitled to ‘28 days’ holiday plus bank
or public holidays’ then employees are
contractually entitled to take bank or
public holidays off.”
In contrast, if the employee does
not have a written contract, or their
contract states that the employee is
entitled only to “statutory holiday” then, says Stevens, the employee has
no express legal right to bank or public
holidays.
He adds: “If an employee wishes to
take leave on a bank or public holiday
it will be a matter for discussion with
the employer, as they would for any
other request for leave on any other
day of the year.”
Of course there is still a risk that
employees may gain the right to bank
or public holidays if the business
always allows them to take this time
off.
Parity with full-time workers extends
to part-timers in terms of contractual
rights to bank or public holidays
as they have a right to a pro-rated
equivalent of their full-time colleagues.
“It does not matter that the part-
time worker does not normally work
on the day on which the bank or
public holiday falls,” Stevens says.
“So, an employee who works Tuesday,
Wednesday, Thursday will be entitled
to three- fifths of the annual bank or
public holidays occurring that year,
even though they never actually work
on a Monday or Friday.”
How much pay?
Getting down to the nuts and bolts
of pay, the law says employees are
entitled to a week’s pay for each week
of annual leave. Stevens states that
for employees with normal, regular
hours of work this generally means
their basic salary without any bonus or
irregular payments taken into account.
Again, calculating a week’s pay
becomes more complicated where
an employee’s pay fluctuates week
to week due to the amount of work
done in their hours of work (where
pay is linked to productivity) or the time the work is carried out (i.e. where
the employee’s pay is linked to a shift
pattern which varies week to week).
In
these circumstances holiday pay will
be based on their average pay during
those normal working hours over the
previous 12 working weeks.
Other rights
The European Court of Justice (ECJ)
recently found that a salesman paid
partly by regular salary and partly by
commission should be paid holiday pay
that includes commission.
In addition, an Employment Appeal
Tribunal found that guaranteed
overtime payments should also be
taken into account when calculating
holiday pay.
When the right to annual leave was first introduced, casual workers with
irregular working patterns were often
given “rolled up holiday pay” (with
their holiday pay included within their
regular wages payments) by their
employers in order to try to avoid
paying an employee while they were
not in work.
The ECJ, as Stevens
points out, ruled that rolled up holiday
pay is unlawful as it means a worker
receives no pay while they are actually
on holiday.
Handling holiday requests
Making holiday requests is one
thing, but getting permission can be
another. Says Stevens: “Where an
employee wants to take holiday at an
inconvenient time, an employer can
serve a counter-notice on an employee
to state that their holiday request
cannot be accommodated.”
Here the counter notice must be
given at least as many calendar days before the requested leave as the
number of days which the employer is
refusing.
Stevens says it’s also possible for
employers to give notice ordering an
employee to use their statutory holiday
on specified dates. But as with normal
holiday request refusals, this notice
must be at least twice the length of the period of leave that the employee
is being ordered to take.
Unused holiday
The subject of what to do with
unused holiday often arises and the
default position set by the law is that
unused statutory holiday expires at the end of the holiday year.
“This means an employee is not entitled to carry statutory holiday
over or to be paid in lieu of unused
statutory holiday,” says Stevens. “Although there are exceptions.” In
practice he sees employers sometimes
agreeing that staff may carry over
unused holiday into subsequent holiday
years.
In general, the only time employees
should be paid for their annual
leave is on the termination of their
employment.
So as is clear, the law on holiday
entitlements is quite complex.
Employers in any doubt should seek
advice – employees will if they feel the
need.
Special cases
- Maternity leave
Women on maternity leave continue to accrue holiday during their leave. A
woman taking her full maternity leave entitlement of 52 weeks will accrue a
full year’s holiday entitlement. - Sick leave
An employee continues to accrue statutory holiday during sickness absence,
even if they are absent for the whole holiday year. This means that an
employee who has exhausted their sick pay entitlement could request to take
paid holiday during their sickness absence. - Sickness during annual leave
The ECJ has previously held that a worker who becomes un t for work
during a period of their statutory leave must be entitled to reschedule the
period of their planned leave that coincided with the period of their sickness.
