An employment tribunal has recently awarded £4,000 to a part-time worker after she had been denied holiday pay. It is, therefore, perhaps time to review the rules relating to holidays. These rules apply to all workers, and may even apply to “self-employed” workers if they undertake to perform the work personally. Employers cannot exclude part-time or casual workers.
Workers are currently entitled to 5.6 weeks statutory paid holiday, including public holidays, meaning that people working 5 days a week are entitled to 28 days statutory holiday in any holiday year. If they are employed for only part of the year then they are entitled to one-twelfth of the annual entitlement, rounded up to the nearest half day, for each month or part of a month of that year. The actual holiday year can be agreed, otherwise it runs from the first day of employment and can, therefore, vary for each worker within the organisation.
This statutory entitlement must be taken within the year and cannot be carried forward. If a worker leaves having taken more than their entitlement for that year then the excess can be deducted provided this is included in an agreement. If a worker leaves having taken less than their entitlement then they should be given pay in lieu of the holiday.
An employee is required to give written notice of their intention. The required notice is double the length of the requested holiday. If the employer decides not to allow that holiday then this refusal must be notified to the worker in writing, and this must be done within a further period equivalent to the requested holiday. As an example, if a worker wishes to take a holiday of 8 working days then they must give written notice at least 16 working days prior to the first day of the holiday, and the employer then has 8 working days from the receipt of the request to decline the request.
An employer can fix some or all of the holiday entitlement. Written notice must be given to each worker, the required notice period being at least double the length of the holiday period to be fixed.
Statutory holidays must be paid at the same rate as the workers normal pay calculated on the basis of that workers normal hours. Payments for holidays in excess of the statutory entitlement can be paid at any rate by agreement. If the worker does not have a normal pay rate or normal hours of work then holiday pay is calculated on the basis of the average pay received in the 12 weeks prior to the holiday.
All employers should ensure that they have an agreement with each worker covering the holiday year, deduction of excess holidays upon termination, and the notification requirements.
WatkinsonBlack are pleased to advise on these and other matters. They have considerable experience in these and other matters, including providing a very cost-effective payroll bureau service. If you want to arrange a no-obligation initial meeting on any taxation or accounting matter then please contact us. Please note that these ideas are intended to inform rather than advise and you should always obtain professional advice before taking any action.