Q&A
1. How much holiday are employees entitled to?
Under the provisions of the Working Time Regulations 1998, employees are entitled to four weeks’ pro-rated paid holiday each holiday year. This means that an employee who works full-time (five days a week) will be entitled to 20 days’ paid holiday each holiday year, while a part-timer working two days each week would be entitled to 8 days’ paid holiday each holiday year.
Those are the minimum rights to holiday. Employers may, should they choose, enhance holiday provisions. To some extent, employers may be bound by industry standards and/or the seniority of staff when determining holiday entitlement. It would be usual, for example, to enhance executives’ holiday beyond that required at law.
Holiday entitlement is measured by reference to the employer’s holiday year. The employer is at will to choose its own holiday year which may be the calendar year, the financial or accounting year or any such other period of 12 months as suit’s the organisation.
2. What about bank and public holidays?
There is no right to holiday on public or bank holidays, although organisations may be bound by previous precedent. Moreover, by law, the eight UK bank and public holidays may be included as part of the statutory four weeks’ holiday. In practice, many employers grant four weeks’ holiday plus public and bank holidays; for full time employees this amounts to a total of 28 days’ annual holiday.
However, changes are afoot. The Government has carried out consultation with a view to increasing the statutory minimum paid holiday to 5.8 weeks (maximum 28 days), to include public and bank holidays. The Government hopes to provide a response to the latest consultation in May 2007.
3. So, can we require employees to work during bank holidays – and are we obliged to enhance their pay for these days?
Yes: it is possible to require employees to work bank or public holidays. Indeed in certain industries, such as leisure, this would be normal. There is no right, unless contractually granted, for employees to have their pay enhanced if they work on a bank holiday.
4. What about rolling up holiday?
The legality of rolling-up holiday has been a contentious point for some time now, featuring regularly in the courts. The basic idea is that an employee’s hourly rate of pay is enhanced to take account for his or her entitlement to holiday pay. The employee may take holiday at such time as he or she requires (subject to company rules concerning notification etc.), but he or she will not be paid during such periods of absence.
The argument against rolling up holiday is that the entitlement to paid holiday is motivated by health and safety concerns. Critics argue that if employees know they will not be paid during periods of holiday they will be less likely to take such holiday, hereby possibly endangering their health.
Last year the ECJ handed down its ruling, in the joined cases of Robinson Steele -v RD Retail Services, Clarke -v- Frank Staddon and Caulfield -v- Hanson Clay Products, that the practice of rolling up holiday pay is in contravention of the Working Time Directive and thus unlawful under European Law. However, interpretations of the ECJ’s decision have conflicted, ranging from those who claim that the practice of rolling-up holiday pay is contrary to EU law and should immediately cease, to those who consider that such a practice is only technically unlawful and that, providing certain conditions are met, may be continued.
Readers may be interested to note that the Government has now taken measures to amend the Working Time Regulations and to bring an end to the practice of rolling-up holiday and the DTI has made a statement proclaiming that rolling-up holiday is unlawful, urging employers to renegotiate contracts and stating that only rolled-up pay that is transparent and comprehensive and made before the date of the ECJ‘s decision may be set-off against the worker’s right to paid holiday. For further advice, do not hesitate to call the Wilsons HR team.