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Back to Basics: Holidays

Given the media frenzy around Ryanair and how their change in the holiday year lead to a shortage of pilots creating havoc for holiday makers, I thought in our back to basic blogs it would be prudent to include one on ‘holidays’.

All workers are entitled to 5.6 weeks paid holiday (the equivalent of 28 days for someone who works 5 or more days per week) under the Working Time Regulations (WTR). These days can include bank holidays. This entitlement differs to any further entitlement under the contract of employment. It is statutory and not open to variation by the employer.
These Regulations are a health and safety measure to ensure a basic minimum holiday entitlement, currently 5.6 weeks. The purpose of holidays under the WTR is to provide workers with a period of rest and relaxation away from the working environment.

Key Issues

  • All workers are entitled to paid annual leave; not just employees. So, that includes part time workers, term time workers, agency workers, casual workers, etc.
  • Holiday years can be changed through consultation, however, when such changes are made ensure that it does not interfere with the running of your business.
  • “Rolled-up” holiday pay is unlawful. This is where employers pay workers a higher hourly rate which is deemed to incorporate holiday pay, so the worker is not actually paid when they take annual leave. It is however still used by some employers. Whilst technically illegal, if it is set out very transparently in the contract and identified separately on wage slips, it can be set off against holiday pay claims raised at a later date.
  • Accrued WTR holiday pay is only payable on termination. It cannot be “rolled over” from one year to the next. However, if a worker’s contractual holiday entitlement is more than the WTR entitlement of 28 days, the additional holiday entitlement can be carried forward but only if permitted by a contract of employment. It is perfectly acceptable for employers to adopt a ‘use it or lose it’ approach to annual leave.
  • Workers on long-term sick may be entitled to accrued WTR holiday pay. They still have to give notice that they intend to take holiday, unless they were unable or unwilling to do so. It is not currently clear exactly what that means. It is likely that they will only be able to carry over 20 days and it should only be backdated a maximum of 18 months.
  • Workers who become incapacitated during a period of annual leave can choose to interrupt their annual leave and take it another time e.g. if a worker injures himself/herself during a skiing holiday, they can request that their annual leave be converted into sick leave, for any period related to their injury. It is for the employee to make this request and, in doing so, they will receive the relevant sick pay entitlement, for example statutory sick pay. Employees may therefore opt not to request for the leave to be converted if they will be replacing paid holiday with SSP.
  • Contractual holiday pay and WTR holiday pay are two separate things. As the WTR holidays are statutory entitlements, the employer cannot vary them in any way. However, anything above 28 days’ holiday is a contractual issue and employers can deal with those as they wish in the contract.
  • Special care needs to be taken regarding employees on maternity leave, who have special rules about accrual of holidays. Holidays are usually allowed to be rolled over due to the pregnancy related absence, or taken prior to the maternity leave period.
  • Part-time workers should not be treated less favourably than full-time workers in respect of their contractual terms. To do so would be a breach of the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000. Therefore, best practice suggests that part-time workers should be given a pro-rata entitlement to holidays, equivalent to that of full time employees.

A worker whose employment begins part way through a leave year has a pro-rata statutory holiday entitlement for that particular year.

If you found this article interesting you might want to read our article on employment contracts and probation periods.

Here at SCE Solicitors, we have a wealth of experience in assisting employers maintain contractual documents. If you would like to discuss any questions relating to holidays or would like us to review your contracts, please contact me on 01133 50 40 30 or at hello@scesolicitors.co.uk for a free legal audit.

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SCE Solicitors is a boutique employment law practice based in Leeds which advises clients nationwide.  Please note that the information in this blog is to provide information of general interest in a summary manner and should not be construed as individual legal advice. Readers should consult with SCE Solicitors or other professional counsel before acting on the information contained here.

Samira Cakali

Samira Cakali is a pragmatic and approachable solicitor advocate with extensive contentious and non-contentious experience in the fields of employment law as well as civil litigation, within a range of commercial businesses from SME’s to multinationals as well as senior executives.

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