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Holiday Entitlement

By Claire West

A guide for employers and their staff

Introduction

The statutory holiday entitlement was changed — from 1 October 2007, the holiday entitlement increased from four weeks to 4.8 weeks (24 days if you work a five-day week). A further increase to 5.6 weeks (28 days if you work a five-day week) will take place from 1 April 2009.

Calculating the additional holiday entitlement

What does 4.8 weeks mean?

The regulations express the holiday entitlement as weeks i.e. 4.8 weeks is 4.8 times your usual working week. If you work a five day week, then 4.8 weeks is 24 working days; if you work 4 days a week, then 4.8 weeks is 19.2 working days, and so on.

What counts as working time?

The Working Time Regulations state that working time is when someone is "working, at his employer’s disposal and carrying out his activity or duties". This includes:

Working lunches, such as business lunches.

When a worker has to travel as part of his or her work, for example a 24-hour mobile repairman or travelling salesman.

When a worker is undertaking training that is job-related.

Time spent abroad working if a worker works for an employer who carries on business in Great Britain.

This does not include:

Routine travel between home and work.

Rest breaks when no work is done.

Time spent travelling outside normal working time.

Training such as non-job-related evening classes or day-release courses.

On 3 October 2000 the European Court of Justice gave judgment in a case concerning the status of 'on-call' time1. The judgment related to doctors employed in primary health care teams although a similar approach has been taken by the courts in other areas. It indicated that 'on-call' time would be working time when a worker is required to be at his place of work. When a worker is permitted to be away from the workplace when 'on-call' and accordingly free to pursue leisure activities, on-call time is not 'working time'.


How do you calculate the holiday entitlement for someone working regular shifts?

It will probably be easier to calculate the holiday entitlement as shifts. So if a worker works four twelve-hour shifts, followed by four days off (the ‘continental’ shift pattern), then the average working week is 3_ twelve-hour shifts. So 4.8 weeks’ holiday is 4.8 x 3_ = 16.8 twelve-hour shifts.


How do you calculate the additional entitlement for someone working term-time only?

You need to calculate how many hours a week is worked on average over the whole year. So if a worker works 40 hours a week for 40 weeks of the year, they work a total of 1,600 hours a year, or 33_ hours a week over 48 weeks of the year2. The holiday entitlement is 4.8 weeks x 33_ hours a week = 160 hours holiday for the year.


How do you calculate the holiday entitlement for someone working casually or working very irregular hours?

It may well be easiest to calculate the holiday entitlement that accrues as hours are worked. The holiday entitlement of 4.8 weeks’ is equivalent to 10.2% of hours worked. The 10.2% figure is 4.8 weeks' holiday, divided by 47.2 weeks (being 52 weeks - 4.8 weeks). The 4.8 weeks have to be excluded from the calculation as the worker would not be present during those 4.8 weeks in order to accumulate annual leave. So if someone has worked 10 hours, they would be entitled to 61 minutes paid holiday. The holiday entitlement is just over 6 minutes for each hour worked.


How do you calculate the holiday entitlement for someone working annualised hours?

You need to calculate how many hours a week is worked over the whole year. So if a worker is contracted to work a total of 1,600 hours a year, or 33_ hours a week over 48 weeks of the year3, the holiday entitlement is 4.8 weeks x 33_ hours a week = 160 hours holiday for the year.


How do you calculate the holiday entitlement for someone working compressed hours?

You need to calculate the holiday entitlement in hours. For example, if a worker works a 36-hour week (over four days instead of five days), their annual holiday entitlement is 36 hours x 4.8 weeks = 172.8 hours holiday for the year. Rather than taking a day’s holiday, they would take the number of hours that they would have otherwise worked on that day (i.e. for 36 hours worked over four days, they would take 9 hours’ holiday for each day otherwise worked).


How do you calculate the holiday entitlement for someone working a 6 day week?

Although 4.8 weeks would equate to 28.8 days for someone working a six-day week, the maximum statutory holiday entitlement is 28 days.


How do you calculate the holiday entitlement for someone who starts working mid way through a leave year?

An online calculator is available on the Business Link site which can calculate the holiday entitlement for those starting or leaving an employer part-way through a leave year.

If they started working after 1 October 2007 (but before 1 April 2009), their holiday entitlement for the first leave year would be calculated by multiplying the proportion of a full year that they worked by 4.8 weeks. For example, if a worker joined a company with 32 weeks left in the leave year, their holiday entitlement would be (32 52) * 4.8 weeks = 3.0 weeks.

If they started working before 1 October 2007, their holiday entitlement for the first year would be the proportion of a full year that they worked, times four weeks, plus the proportion of a full year that they worked after 1 October 2007 multiplied by 0.8 weeks. For example, a worker starts work on 3 September 2007, and their leave year ends on 31 December. Their holiday entitlement is (17 weeks 52) * 4 weeks = 1.31 weeks, plus (13 weeks 52 weeks) * 0.8 weeks = 0.2 weeks, giving a total holiday entitlement of 1.51 weeks.


How do you calculate the holiday entitlement for someone who leaves an employer mid way through a leave year?

An online calculator is available on Business Link site which can calculate the holiday entitlement for those starting or leaving an employer part-way through a leave year.

If they left the employer after 1 October 2007, their holiday entitlement on leaving would be the proportion of a full leave year that they worked, multiplied by four weeks, plus the proportion of a full leave year they worked after 1 October 2007, multiplied by 0.8 weeks.

For example, a worker leaves an employer on 28 December 2007, and their leave year runs from 1 April to 31 March. Their holiday entitlement is four weeks’ times 39 weeks [the number of weeks from 1 April to 28 December] 52 = 3 weeks, plus 0.8 weeks times 13 weeks [the number of weeks from 1 October to 28 December] 52 weeks = 0.2 weeks, giving a total holiday entitlement of 3.2 weeks.

Any holiday they had already taken in the final leave year would then be subtracted from this total entitlement.


Does the additional holiday entitlement extend to agency workers?

Yes. All workers covered by the Working Time Regulations are entitled to the increase in holiday entitlement.


Does the holiday entitlement extend to those working offshore?

Yes. A small change was made to the Working Time Regulations, which came into force on 1 October 2006, relating to offshore work. The Government did not consider any change to the regulations was required as a matter of law but to avoid future uncertainty the amendment clarified that the definition of offshore work included work in the UK part of the Continental Shelf as well as within GB territorial waters. The additional entitlement will extend to workers covered by the existing Working Time Regulations, including those involved in offshore work.


Does the additional holiday entitlement include time off for bank holidays?

Yes. Time off for bank holidays can be counted against a worker’s annual holiday entitlement.


What is the maximum statutory holiday entitlement?

The maximum statutory holiday entitlement will be capped at a maximum of 28 days, although an employer can give more.


Do current holiday differentials have to be maintained?

No. Any holiday that an employer may grant staff above the statutory holiday entitlement is a contractual matter between workers and employer.


Should part-time staff receive time off if they don’t work on days on which bank holidays fall?

Under the new regulations, time off for bank holidays should be pro-rataed. Part-time workers are entitled to 4.8 weeks’ holiday, based on the hours a week that they work, regardless of whether they work on days on which bank holidays fall.


Do I have to round up the holiday entitlement to the nearest half- or whole-day?

No, although you may find it easier to manage part-days holiday by rounding up to the nearest half- or whole-day.


Who is entitled to the increase?

All workers covered by the Working Time Regulations are entitled to the increase in holiday entitlement. Those working in sea fishing, merchant shipping and mobile workers on inland waterways are not covered by the Working Time Regulations, nor are workers in Northern Ireland or the self-employed. The relevant parts of the Regulations do not apply to mobile staff working in civil aviation.


Can payment be given in lieu of the additional holiday?

Yes, until 1 April 2009. Four weeks’ leave must still be taken as holiday in each leave year. For statutory leave entitlement accruing after 1 April 2009, payment in lieu will not be permitted (although payment in lieu of any leave above the statutory entitlement could be allowed depending on the contract of employment).


Can leave be carried over to another leave year?

Four weeks’ leave must be taken in each leave year. However, any unused additional holiday entitlement can be carried over to the following leave year.


What about premium rates of pay for working on a bank holiday?

The Working Time Regulations describe how to calculate the minimum amount a worker should be paid for the holiday entitlement. Any premium rate of pay for bank holidays (such as ‘double time’) is a contractual matter between employer and workers.


What about someone who is off on maternity leave?

Employees on maternity leave retain their entitlement to statutory annual leave throughout ordinary and additional maternity leave. If the employee is also entitled to contractual annual leave she will continue to accrue this additional, contractual entitlement during Ordinary Maternity Leave.

Statutory annual leave cannot be taken at the same time as maternity leave. Before an employee goes on maternity leave she may wish to consider taking any outstanding leave and perhaps delay the start of her maternity leave. Alternatively, it may be possible for her to take annual leave in the period between the expiration of maternity leave and the expiration of the leave year.


What about someone who is off on paternity leave?

Workers on statutory paternity leave retain their holiday entitlement. Workers on statutory paternity leave should still be able to take their holiday entitlement.


How do you manage part-days?

Calculations may result in part days (for example 19.2 days for someone working 4 days a week). An employer can decide how to treat these part days (although they cannot be rounded down to the nearest full day); they do not need to be rounded up to the nearest full day but an employer can choose to do so if they wish. Other options that an employer can choose to allow include staff taking a full day’s leave and just paying them for the part day they are owed; the part day could be taken off a day’s shift, enabling the member of staff to leave early or come in late; or the part day could be carried over to the following leave year.


Do I have to open on a bank holiday?

No. Under the Working Time Regulations, you can require your staff to take holiday at certain times, such as bank holidays and plant shutdowns.


Can an employer specify when holiday is taken, on a bank holiday, for example?

Yes under the Working Time Regulations, an employer may specify when holiday is taken, on a bank holiday or for a christmas shutdown for example.


Can an employer refuse holiday?

Yes. Under the Working Time Regulations, an employer may refuse the worker permission to take leave requested within a period equivalent to the period of the leave. For example, if a worker wants to take a day’s leave, he or she would have to give their employer at least two days’ notice. If a worker has given the employer two days’ notice that they want to take one day’s leave, the employer can come back within one day to refuse the leave.


Because the date of Easter varies, some April-March leave years may contain two Easters, and others none. How should an employer handle the different number of bank holidays in April-March leave years?

Because the date for Easter varies, employers who give their staff four weeks’ holiday, plus time off for bank holidays, could find themselves giving 30 days’ holiday (pro-rata for part-time staff) one year (four weeks’ plus ten bank holidays), and 26 days’ another year (four weeks’ plus six bank holidays). Staff should be able to take 4.8 weeks holiday in a year. To ensure this is the case, employers should either:

Agree with their staff that holiday is carried over in order to cover the bank holidays for a leave year when two Easters fall, or;

Give an additional two days holiday in a leave year during which Easter does not fall (to ensure that staff receive 4.8 weeks’ holiday in that year)


Do employers need to reissue amended contracts of employment?

No. As this is a change in terms of employment to the benefit of employees, employers do not need to reissue contracts; but do need to inform staff in writing of the increased holiday entitlement, either through a letter to staff or by a statement on pay slips, for example.

How should the additional holiday be treated when calculating weekly working time?

When calculating average weekly working time, if the worker is away during the reference period (the period over which working hours are averaged) because he or she is taking time off as part of the current four-week holiday entitlement, this time is made up for in the calculation by adding the hours worked during the days which immediately followed the 17-week period, using the same number of days as those when work was missed.

The additional holiday may however be included as non-working time for the purpose of calculating weekly working hours — the time does not have to be made up for - just as contractual leave in excess of the statutory four-week entitlement may be treated at present.


How long can unused holiday entitlement be carried over?

Unused holiday entitlement can only be carried over to the following leave year, although an employer may require any carried-over holiday to be taken within a specified period within the following leave year.



The exclusion

How does the exclusion work?

This incentive or exclusion aims to help employers that already give 28 days leave and may have set up complex systems to deal with the 3 different types of leave — statutory, contractual and bank holidays. DTI recognises that to change these systems would cost time and money — and could be seen as punishing "good employers”. Employers eligible for the exclusion will need to continue to meet its requirements and other legal obligations relating to annual leave. There is no application process - if satisfied they meet the requirements an organisation should carry on as normal.


Do I qualify for the exclusion?

To comply with the changes an employer must, as at 1 October 2007: give at least 28 days annual leave (pro rata for those working part time, regardless of what days they work) which may not be replaced by a payment in lieu; an employer may allow carry over of that portion of unused holiday above 4 weeks but if they do so it may only be carried over into the following leave year.


What if some employees meet the terms of the exclusion and some do not?

A company qualifies for the exclusion, not its employees. If all employees do not meet the terms of the incentive by 1 October 2007, the company does not qualify.


What about St Andrew’s Day in Scotland?

The holiday entitlement has been increased to 28 days’, pro-rata for part-timers, rather than giving a right to specific days’ off. When the leave is taken is a matter for discussion between employer and staff.


What redress is there if a worker does not feel they are receiving their holiday entitlement?
If you are a worker and you feel you are not receiving your entitlements, we suggest you take the following steps:

Talk to your manager, you may be able to settle the matter straight away.

Contact a trade union representative (if you have one). They will be able to advise you what to do.

If a formal grievance procedure does not resolve the matter, you can make a claim to an employment tribunal.

If you want to make a claim under the regulations, the Advisory, Conciliation and Arbitration Service (Acas) will offer the services of a conciliator to help the employer and worker to reach a settlement without the need for a tribunal hearing. Part of the conciliator’s role is to explain how tribunals work and how a tribunal arrives at decisions. This service is free of charge. If you want to take a complaint to a tribunal, you should do so within three months. The tribunals offer an informal way of ensuring that workers are given their rights. These tribunals generally have three members: a legally qualified chairperson and two other lay members who have experience of dealing with work-related problems. Where the Tribunal finds the complaint well-founded, it shall make a declaration to that effect and may make the employer pay compensation to the worker.


Is there a qualifying period for the additional holiday entitlement?

No. Your entitlement to leave begins on the first day of employment, but for the first year of employment, an employer may restrict the rate at which staff take the leave. Under such a system the proportion of holiday that a worker can take (with the employer's agreement) builds up over the year at a rate of one-twelfth of the annual entitlement each month.