Employment law update July 2009: We’re all going on a……..28 day holiday!
As you will be aware, the Working Time Regulations have been increasing the amount of statutory holiday entitlement since 2006 when it was 20 days holiday and this could include bank holidays. The current statutory entitlement is now 28 days which can include bank holidays.
Who is entitled to it?
This update means that every employee is entitled to a minimum of 28 days holiday pro rata in any holiday year. Some employees may be entitled to more if it is agreed in the contract of employment. The entitlement applies whether they are full-time, fixed term, part-time, casual, zero hours and if they work bank holidays or not.
What is the benefit?
The benefit is that all employees will receive an equal pro rata entitlement, regardless of the day of the week they work. The employee that works Wednesday and Thursday will receive a pro rata entitlement along with the employee that works only Mondays and Fridays.
Can I carry holidays over?
The aim of the legislation is to ensure all employees have adequate holiday periods to allow them to rest, recuperate and maintain well-being; avoiding stress and associated health problems. As a result, it is a potential breach of the legislation to carry over any of the 28 days pro rata statutory holiday entitlement to the next holiday year.
How do I calculate it?
Use the total 28 days and pro rata if it is appropriate then deduct any bank holidays when the employee is off from the total entitlement (28 days pro rata), if they fall on a day that they would normally work.
For a full-time Monday – Friday worker this will remain very much as before except in the event that they leave the business. If they were to leave, you would calculate their holiday entitlement to the date of leaving then deduct any bank holidays they have taken and been paid for from the total entitlement to their leave date.
Example:
Holiday year is 1st January – 31st December.
- Full-time employee leaves on 31st March. They are entitled to 28 days so divide by 12 months to give monthly holiday accrual of 2.3. Multiply this by three months to give a total holiday entitlement of seven days. They need to have the one bank holiday on 1st January deducted along with any other holidays taken. Assuming they have not taken any other holidays to date, they are entitled to 6 days holiday pay.
- Full-time employee leaves on 1st June. As above, they are entitled to 28 days divided by 12 months to give monthly accrual of 2.3. Multiply this by five months to give a total of 11.5 days. They need to have 1st January, two Easter bank holidays and two May bank holidays along with any other holidays taken. Assuming they had not taken any other holiday to date, they are entitled to 6.5 days holiday pay.
Risks
In the event of an employee’s entitlement being reduced, please contact us as there may be contractual, custom and practice considerations. For example, an employee that works Monday and Friday will only be entitled to 11.5 days instead of a minimum of 13 days previously, as they benefited from at least five of the eight bank holidays due to the days of the week they worked.
If you would like P3 People Management to assist you with the introduction of this holiday system or any calculations, please do not hesitate to contact us at info@p3pm.co.uk