TALKING SHOP
Happy Holidays! Gareth Edwards
P
aid time off from work means different things to different people - a "dream" vacation for some, for others, the opportunity to catch up with friends, family or the gardening. Whatever the plans, employees regard holiday to be the most significant employment benefit that they receive.
How much holiday are my employees legally entitled to? From their first day of employment, employees accrue statutory holiday entitlement under the Working Time Regulations. Each year, they are entitled to take 5.6 weeks ‘statutory holiday’. For an employee working five days a week, this amounts to 28 days leave each year which can include the usual bank/public holidays. Employers can offer more than statutory holiday. Part time workers are entitled to a pro-rated equivalent; someone working three days a week will receive 3/5ths of 5.6 weeks leave, namely 17 days.
How much do we have to pay our staff when they take holiday? Employees are entitled to a week's pay for each week of leave. How a week's pay is calculated will depend on the circumstances of the employee. For employees with normal regular hours of work this generally means their basic salary without any commission or bonus. However, if the employee's pay fluctuates week to week, holiday pay will be based on their average pay during those normal working hours over the previous 12 working weeks, including any "commission or similar payment which varies in amount". Overtime pay will only be included in the calculation where overtime is guaranteed. If the employee works irregular hours, a week's pay is calculated as an average of all the sums earned in the previous 12 working weeks including any overtime payments and commission.
Are our staff entitled to bank or public holidays in addition to their holiday entitlement? There is no statutory right to bank or public holidays. Look at is the contract of employment - if it states that staff are entitled to "x days holiday plus bank or public holidays" then employees are contractually entitled to bank/public holidays. Otherwise the employee is entitled only to "statutory holiday" and has no express legal right to bank or public holidays. If bank or public holidays are given in addition to "normal" holiday entitlement as a matter of custom and practice then employees may have accrued an implied legal right to bank or public holidays. 2011 had the Royal Wedding, next year there is the Queen's Diamond Jubilee, so in 2011 and 2012, employees with a contractual right to public holidays will be entitled to 9 public holidays rather than the usual 8. Part time workers who have a contractual right to bank or public holidays 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/public holiday falls. So, an employee who works Tuesday, Wednesday, Thursday will be entitled to 3/5ths of the annual bank/public holidays occurring that year.
Can we require our staff to take leave when it suits us? Under the WTR, an employee must give notice if they wish to take statutory holiday equal to at least twice the period of leave that they are requesting. An employer may object to the request for leave by giving a counter-notice. This must be given at least as many calendar days before the proposed leave is due to commence as the number of days which the employer is refusing. An employer may give notice ordering an employee to take statutory holiday on specified dates. Such notice must be at least twice the length of the period of leave that the employee is being ordered to take.
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What happens to unused holiday? Under the WTR unused statutory holiday expires at the end of the holiday year. An employee is generally not entitled to carry statutory holiday over or to be paid in lieu of unused statutory holiday. Employers may agree that staff may carry over unused holiday into subsequent holiday years and may impose the condition that such holiday is used within a specific period or is otherwise lost. On termination of employment, the employee is entitled to be paid in lieu of any accrued but untaken holiday entitlement.
We have an employee about to take maternity leave, what do we do about her holiday? Women on maternity leave continue to accrue holiday during their leave. So, a woman taking her full maternity leave entitlement of 52 weeks will accrue a full year's holiday entitlement. The employer has the option of requiring the employee to take the holiday she will accrue either before or after her period of maternity leave. The same principles apply to employees taking paternity leave and parental leave where the period of leave spans two holiday years and the employee therefore risks losing their holiday entitlement.
I have an employee who has been off for some time due to ill health, what do I do about his holiday? 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. It is generally agreed that employees who are not permitted to take their statutory holiday while they are on sick leave are allowed to carry holiday over to the next holiday year.
My employee was sick during their holiday and has told me now that they are entitled to re-schedule their holiday, is this correct? The position is unclear. The European Court of Justice has held that an employee who is incapacitated during a period of previously scheduled statutory holiday should have the right to reschedule the holiday for a later date. The Employment Tribunal agreed with this proposition. However, neither the ECJ nor the ET's decision is definitive on this point. In the absence of clarity, an employer may wish to require that holiday will only be rescheduled where the employee has complied with its sickness absence procedures during their holiday period and include in its sickness absence procedure a requirement that in these circumstances the employee is required to provide a medical certificate confirming their illness.
Gareth Edwards Gareth Edwards is a partner in the employment team at Veale Wasbrough Vizards.
gedwards@vwv.co.uk.
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