Employers have a legal obligation to provide all staff (full time, part time and casual workers) with paid holiday during the working year. It is important that everyone understands how much holiday each person is entitled to and how much pay they should receive.
Most employees who work a normal 5-day week (i.e. Monday to Friday or some other variant) are entitled to a minimum of 5.6 weeks of holiday which is equal to 28 days in the working year which is inclusive of the public and bank holidays.
If an employee works more than 5 days a week (i.e. 6 or 7), they will still only be entitled to 28 days paid holiday a year.
Part-time workers on fixed hours and days per week are given paid annual leave but on a pro-rata basis, their annual leave is based on the number of days or hours which are worked in a normal week. For example, if an employee works a four-day week they would be entitled to 22.4 days (4 days x 5.6), where the number is not a whole number you can round up to the nearest half day if this makes it easier for admin purposes. It’s not a legal requirement but you must never round down.
It is also important to remember that part-time workers should not be treated less favourably than full-time workers, e.g. if full-time employees are given extra days off then this must also be given to part-time employees as well (on a pro rata basis.)
Variable Hours Staff
For employees working variable hours each week, their holiday entitlement and pay will be calculated on the average hours and pay the employee has earned in the past 12 weeks. This reference period is likely to change from 12 to 52 weeks in 2020.
After 12 weeks in the job, agency staff will be entitled to paid annual leave, having equal rights to employees and workers.
Holiday pay should be calculated on an average of all earnings, including contractual or regular overtime, bonus and commission.
Public and Bank Holidays
If an employee’s normal working day falls on a public/bank holiday but the business is closed then this will be a paid annual leave day.
If the employee’s normal working day falls on a public/bank holiday but the business is open then they have a right to request this day as annual leave, in the usual way.
If the employee is shift based, variable hours or zero hours and their working day does not fall on a public/bank holiday then they are not entitled to be paid annual leave for the day.
Restrictions on taking holidays may be expressly stated in the contract of employment, implied from custom and practice or incorporated into individual contracts from a collective agreement between the employer and trade union(s).
Employers may choose to:
- shut down for certain periods during which all or some groups of employees have to use their annual holiday entitlement;
- nominate particular dates as days of closure, when workers are expected to take annual leave (for example, over the Christmas and New Year period);
- determine the maximum amounts of leave that can be taken on any one occasion and also the periods when leave may be taken.
- request an employee to take all or any of the leave to which an employee is entitled at specific times, provided that the employee is given prior notice.
- refuse an annual leave request at a certain time, although you cannot refuse to let workers take the leave at all.
- give notice if you require an employee to take leave at a specific time. For example, if you require an employee to take 1 week’s leave at a specific time, maybe due to a quiet period, then you will be required to give your employee 2 weeks’ notice.
Does Annual Leave accrue when an employee is on Long Term Sickness Absence?
In short, yes. The statutory minimum entitlement to paid holiday will continue to accrue during periods of absence.
What happens if an employee claims they were Sick during their Annual Leave?
Employees who are sick during planned annual leave have the right to request to take that annual leave at another time when they are well. Our advice is to ask to see a Fit Note and treat this absence in line with your Company’s Sickness Absence Policy.
How do you manage leave for an employee on maternity leave?
You should discuss leave arrangements with the pregnant employee as soon as possible. It is best to put any agreement you come to in writing so that you are clear about the taking of annual leave and maternity leave. For example, if an employee plans to take ten months off, they may decide to use a combination of their 5.6 weeks’ annual leave and their maternity leave. During the time the employee is on maternity leave, she will still accrue annual leave in the normal way. Maternity pay and annual leave cannot be paid at the same time so the maternity pay will have to end and the annual leave start.
What happens to holidays that are not taken during the holiday year?
Any leave not used up by the end of the holiday year is simply lost. Employers should encourage employees to use up their leave and can even agree that an element is carried forward. Employees are not entitled to be paid for unused leave whilst in employment.
Is there an entitlement to accrued holiday pay for leave untaken on termination of employment?
No matter how short the period of employment, the worker has the right to be paid for any statutory leave accrued during that time. Under Section 1 of the Employment Rights Act 1996 employers should include in a written statement of employment particulars, sufficient detail to enable the precise calculation of a worker’s entitlement to holiday pay on termination of employment.
If you offer more than the 5.6 weeks’ annual leave, then you can agree separate arrangements for the extra leave.
You can also write into your contracts of employment that you reserve the right to insist that an employee uses up any outstanding leave during their notice period.
Although this is a quick guide to annual leave, we are aware that each Company has individuals who may fall out of these general advice guidelines. For any specific guidance we would urge you to contact one of our HR Consultants to discuss further.