HOLIDAYS AND HOLIDAY PAY

Is there a right to holidays and holiday pay?

Under the Working Time Regulations 1998 most workers have a statutory right to four week’s paid holidays. Some workers may be entitled to more than the statutory amount of holidays. This depends on the contract. If your contract tries to give you less paid holiday than the statutory entitlement, the statutory entitlement applies. Even if you sign a contract which states that you are only entitled to, for example, two week’s paid holiday per year, this does not take away your statutory entitlement to four week’s paid holiday.

If you are not entitled to statutory paid holiday the amount of holiday you are entitled to each year and the rate of holiday pay you will receive will depend solely on your contract of employment.

• A person working under a contract of employment, that is, an employee; or
• A person who is paid a regular salary or wage and who works for an organisation, business or individual. The employer normally provides work, controls where the work is done and supplies tools and equipment. This definition includes some self-employed people working under a contract for services, unless they are running a business or offering a professional service and the other party is a client.

Part time workers and workers in their first year of employment are covered by the Working Time Regulations in the same way as other workers. There is no maximum age limit on who counts as a worker. A worker in her/his first year of employment has special rules about how her/his holiday accrues.

Who is not entitled to statutory paid holiday

The statutory right to paid holidays does not apply to the following workers, who will have to rely solely on contractual rights for holidays:-

• Workers in air, rail, road and sea transport
• Workers in inland waterways and lake transport
• Workers in sea fishing
• Workers engaged in other work at sea (this is principally offshore work in oil and gas industries)
• Trainee doctors
• Members of the armed forces, police and civil protection services

How much paid holiday is a worker entitled to

The statutory amount of paid holidays a worker is entitled to each leave year is four weeks (pro rata for part-time workers).

The statutory entitlement to paid holiday is not additional to any contractual entitlement.

Bank holidays and public holidays

There is no general statutory right for you to take bank or public holidays, with or without pay. Any rights that you have to bank or public holidays with or without pay will be contained in your contract of employment. If you are given bank or public holidays off and you are paid for them, they will count towards your entitlement to statutory holiday unless the contract specifies that the bank/public holidays are given in addition to statutory holiday.

An employer may choose to give workers bank and public holidays in addition to the four week’s statutory paid holiday. If this is the case, then part-time workers for that employer should be offered the same entitlement to bank and public holidays on a pro-rata basis.

Leave years

Entitlement to holiday normally relates to a leave year. The start of the leave year will usually be specified in the contract. If there is no specific date, the leave year will start on:-

• 1 October, if you started work with the employer on or before 1 October 1998, or
• the date you started employment for that employer, if you started after 1 October 1998.

Calculating Holiday Entitlement/Pay

How holiday accrues when a worker starts part way through a leave year

If you start work part way through a leave year, your entitlement to leave is proportionate to the amount of the leave year that you work.

What is a week’s holiday

A week’s holiday should be equivalent to a worker’s normal working week. This means that someone who works 5 days a week will be entitled to 20 days’ annual paid holiday in a leave year, while someone who works 2 days a week will be entitled to 8 days’ paid annual holiday in a leave year. If your normal working week is expressed in hours, your annual leave may be expressed in terms of hours too.

If you work irregular hours, add up all the hours of work you have done over the past 12 weeks (or the number of weeks worked, if less than 12) and then divide by 12 (or the number of weeks worked if less than 12) to get the average working hours.

Amount of holiday pay

Holiday pay is paid at the rate of a normal week’s pay for each week of leave. You may be entitled to higher holiday pay under your contract.

A normal week’s pay is either:-

• For a worker with regular hours your earnings for a normal working week, after tax and national insurance contributions have been deducted; or
• For a worker whose normal working hours vary from week to week, the average net hourly rate of pay multiplied by an average of the normal weekly working hours over the previous 12 weeks. If 12 weeks have not yet been worked, it would be sensible to calculate over the period that has been worked.

Overtime

Overtime hours of work do not count toward normal weekly hours of work unless you are contractually obliged to work a specific number of hours guaranteed overtime.

Entitlement to paid holiday from day one of employment

From 25 October 2001 all workers, other than those who are exempt, are entitled to paid holiday from their first day of employment. However, this does not mean that a worker is entitled to take four weeks paid leave on the first day of employment. Regulations set out how the amount of paid holiday the worker is entitled to, will accrue during the first year of work.

How does the amount of paid holiday accrue during the first year of work for workers who started after 25 October 2001

For a worker who starts work after 25 October 2001 during the first year of employment, the proportion of the leave which you may take (with the employer’s agreement and provided you have given proper notice) builds up over the year. The amount of leave which may be taken builds up monthly in advance at the rate of one twelfth of the annual entitlement each month. Where this calculation does not result in an exact number of days leave, the amount of leave is rounded up to the nearest half day. Any leave which has already been taken is deducted from the leave calculated to have accrued.

When and how can I take holidays

Can you choose when or how much holiday to take or can an employer dictate when or how much holiday can be taken

You may ask to take any leave to which you are entitled by statute when you choose, provided you give your employer the correct notice and takes into account the terms of any relevant agreement. However, your employer has a right to refuse a request, provided the employer gives the correct notice and takes account of the terms of any relevant agreement.

Your employer can require you to take all or any of the holiday that you are entitled to at a specific time, provided that you are given the correct prior notice and the employer takes into account the terms of any relevant agreement.

The Working Time Regulations do not put any limit on the amount of holiday that can be taken at any one time. This means that there is no entitlement to take two weeks of holiday off at once, unless the relevant agreement or employment contract allows for it.

(A relevant agreement is defined as a workforce agreement which applies to the employee.)

Can a worker carry untaken holiday over from one leave year to the next

If you are unable to take all your holiday entitlement in one year your contract may allow you to carry over days of contractual holiday to the following year. Days of statutory holiday cannot be carried over unless your employment is terminated. An employer may be willing to treat days of untaken statutory holiday as days of contractual holiday and allow them to be carried over into the next leave year.

The contract may allow that the worker is given pay in lieu of any contractual holiday not taken. The Regulations do not allow pay in lieu for statutory holiday.

Notice to be given by the worker or employer before holiday is taken

• An employer can require you to take all or any of the holiday which you are entitled to at a specific time, provided that you are given prior notice. The amount of notice your employer must give must be at least twice as long as the period of holiday to be taken.
• You must give notice to your employer when you wish to take holiday. The notice period must be at least twice the period of the leave to be taken.

The worker is refused a pre-arranged holiday

If your employer has not given the worker proper notice of a refusal to take holiday, but still refuses to allow you to go on holiday you can claim compensation at an employment tribunal. You must make the claim within three months of the date you asked for the holiday to start. The tribunal can order compensation to be paid to you for the fact that you have not been allowed to take holiday but cannot insist that the employer actually allows you to take time off.

What happens to holidays/holiday pay when the worker leaves a job

You cannot be forced to take your statutory holidays during the period of notice of dismissal, unless your contract of employment states that your employer can dictate when holidays are taken and you have been given proper notice of when the holiday must be taken.

If you are dismissed for any reason other than gross misconduct you will be entitled to the statutory amount of paid notice plus any additional notice provided for in your contract of employment.

If you are dismissed for gross misconduct you lose your entitlement to be given paid notice or pay in lieu of notice. You will remain entitled to accrued statutory holiday pay, but possibly not contractual holiday pay.

If you “owe” holiday when you leave a job

Many employees have holiday entitlement which is calculated on a pro-rata basis throughout the year. This means that they earn so many days holiday each month. Many employers will allow an employee to take holidays before they have actually earned them.

If an employee has taken statutory holidays which s/he has not earned, the employer will be able to make a deduction from final pay for the excess amount only if there is an agreement in writing that allows for this, either between the employee and employer, or between an elected workforce representative and the employer. This agreement must be known to both the employer and the worker in advance of any deduction being made. Alternatively the employee may agree to do additional work to the value of what is owed. If there is no written agreement in advance that allows the employer to make a deduction from the worker’s pay because the worker has taken too much leave, this will be an unlawful deduction from wages.

How to increase or enforce holiday entitlement

If an employer refuses to give you statutory holiday rights and dismisses you for trying to enforce them, this is an automatic unfair dismissal, provided that the tribunal accepts that this is the reason for the dismissal. This is because you have been dismissed for trying to exercise your statutory rights.