More holidays courtesy of HM Government - the impact on employers

The Government have decided to increase the minimum entitlement to holidays for employees.

For an employee working a 5-day week the new rules mean an increase in holidays from 20 days to 28 days per year (including bank holidays).

The increase in entitlement is to be phased in, which increases the cost to employers gradually, but it means an administrative nightmare in keeping track of holiday entitlement.

The new rules start on the 1st October 2007, from this date the minimum entitlement becomes 24 days per annum for a 5-day per week worker. The second increase starts from 1st April 2009, when the minimum entitlement becomes 28 days per week for a 5-day per week worker. These figures include bank holidays, although depending upon the contract of employment, some people have to work bank holidays. So to phrase it the other way, from April 2009 all 5-day a week employees will be entitled to the equivalent of 4 weeks plus bank holidays as paid leave. Providing this level of holiday entitlement was always the Governments intention.

Strangely the increase is not as beneficial to those working a longer week. For example those with a 6-day working week will get an annual entitlement of 4.8 x 6 = 28.8 days from 1st October 2007. However the minimum entitlement is capped at 28 days. The further increase in April 2009 would not then bring any increased entitlement for 6-day working week employees.

For a part time worker, working for say 2 days a week, the increase from 1st October 2007 will be to 2 x 4.8 = 9.6 days as a minimum. Rounding down of the entitlement is not permissible. So unless an employer wants to start calculating exactly what time an employee can go home, they will have to round the entitlement up.

Holiday Entitlement

Note that the right to take leave on any given day or date is still subject to the terms in the contract of employment. Workers do not get the right to take holidays on particular dates where the emplyer does not agree to this.

Carry over of leave

A minimum of 4 weeks annual leave must be taken each year (for a 5-day per week worker), to comply with the European Working Time Directive. If employer and employee both agree in writing, then any excess over the 4 weeks may be carried forward.

Payment in lieu of holidays

It is possible to opt for pay in lieu of the extra holiday entitlement but only for a transitional period. From 1st April 2009 payment in lieu of statutory holiday entitlement will be prohibited apart from on the termination of an employment.

Nasty surprises for employers

Many employers currently provide 4 weeks annual leave plus bank holidays for their staff, and they might think the new regulations will not affect them - wrong!

Where the employee is required to take bank holidays but is on a different type of leave on that date, for instance sick or maternity leave, then the DTI state that the worker should be provided with another day, so they receive the minimum statutory entitlement.

Where the employer allows pay in lieu of holidays, currently 4 weeks holidays must be taken and the balance can be paid. From 1st April 2009, for a 5-day per week worker, 28 days days must be taken before payment in lieu should be operated.

Where the 'year' for annual holidays is 31 March the employer might want to change this. The variable timing of Easter bank holidays means that the number of bank holidays in a year that ends on 31 March could vary by up to four days! (eg one year might have 6 bank holidays whilst the next has 10) So in some years minimum entitlements are not met.

Part time workers with a pro rata 4 weeks holidays plus bank holidays may need extra days. For example if a worker normally works Tuesday to Thursday, they will miss all Monday bank holidays. They are entitled to 4.8 x 3 = 14.4 days from 1 October and 5.6 x 3 = 16.8 days from 1st April 2009.

Calculation of minimum leave entitlement

Because the new rules are being phased in on what are probably inconvenient dates, there will be a need to pro-rata the entitlements. So for a worker on a 5-day week and a 31 December year for holiday entitlement:

Year to 31 December 2007

4 weeks x 9/12 months = 3 weeks

4.8 weeks x 3/12 months = 1.2 weeks

So 4.2 weeks for the year to 31 December 2007

Year to 31 December 2008

4.8 weeks for the year to 31 December 2008

Year to 31 December 2009

4.8 weeks x 3/12 months = 1.2 weeks

5.6 weeks x 9/12 months = 4.2 weeks

So 5.4 weeks in total

For more information see
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Article Source: Free Content Articles Directory

Article written by Rebecca at FindASolicitor.me.uk

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