As we start to work through the summer holidays, we thought this would be a good time to remind employers of our 10 top tips regarding annual leave.
- The UK minimum annual holiday allowance is 5.6 weeks, which typically translates to 28 days for full-time employees. These are the ‘statutory’ days. Remember that although 28 days is enough to cover the European minimum requirement of 20 days plus 8 bank holidays (remember that there are 8 in Scotland), workers do not have an automatic right to have the day off on bank holidays, nor is there any obligation to pay a premium rate; this is left entirely to employer discretion.
- There is no automatic entitlement in law to carry over any unused holiday to a new holiday leave year, other than in specific circumstances such as following maternity leave or an extended period of sickness absence. However, if it is feasible, employers could allow a limited number of days to be carried over. Many employers allow three to five days to be carried over but set a deadline; for example, employees must take it in the first three months of the new holiday leave year. In other words, use it or lose it!
- The annual leave rules and the process for requesting leave should be set out in each employee’s contract of employment and your staff handbook so that everyone is clear on what they can and cannot do. Contracts should specify whether the annual leave entitlement includes bank and, if so, how many. This would give the employer flexibility to choose not to give an additional day off for extra bank holidays, eg the 2022 platinum jubilee. (Although the employer will, of course, want to think about the impact on employee engagement before making such a decision.)
- Employers cannot offer to pay in lieu of untaken holidays for any of the 5.6 weeks (28 days) of statutory leave at any time other than on termination of employment. Statutory leave is seen as a health and safety requirement to ensure workers take time off to rest. However, if employers offer more than 5.6 weeks (28 days) then the excess can be paid for with agreement. This could be managed on a salary sacrifice basis, which reduces income tax and national insurance contributions.
- Workers can ask for paid holiday during a period of sick leave. Also, if they fall ill just before or during a holiday, they can ask to take this as sick leave instead of annual leave, in which case the annual leave would be credited back. The employer can expect the worker to provide evidence that they had been sick.
- Employers can reject requests for leave and schedule leave to be taken on specific days for business reasons, for example, a Christmas – New Year shutdown. To refuse a holiday request, the employer is expected to give at least as much notice as the length of annual leave requested.
- Those who work irregular hours, for example, casual workers, are entitled to have paid time calculated against time actually worked. Please refer to the Gov.UK document Calculating Pay for Workers Without Fixed Hours for further information.
- The holiday entitlement for part-time workers is also set at 5.6 weeks. Depending on their attendance pattern – eg reduced days, different hours on different days or reduced hours over 5-days, their entitlement may be fewer than 28 days. It may help to calculate entitlement in hours and pro-rate against their weekly hours if they worked full time.
- It’s OK for an employer to offer additional leave to their employees on top of the legal minimum; this is referred to as company leave. It’s also OK to apply different rules to company leave; for example, you could specify that a worker needs to have been employed by you for a continuous period of, say, 5-years before they become entitled to it.
- If a new employee starts their job part-way through your holiday leave year, they are only entitled to a portion of their total annual leave for that leave year. What they get depends on how much of the year is left; for example, if you are offering the statutory minimum of 28 days and they join six months into the leave year, then they would be entitled to only 14 days. It is a good idea to explain this to new starters so they do not overbook their holiday. You may have to allocate holiday against bank holidays in the first year, as the pro-rated entitlement from the eight bank holidays may not match the number of remaining bank holidays.
