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Conditions of Service - Holidays

ARTICLE ORIGINALLY PUBLISHED JULY 2007

CLIENT'S QUESTION

I know the minimum annual leave entitlement for staff changes in October 2007. I am confused as to how to calculate the extra days for my staff and what it means for bank holidays.

The Law

The Working Time (Amendment) regulations 2007 increases the minimum annual leave for all employees in two stages.

Stage one

The current minimum of 20 days increases to 24 days (4.8 weeks ) from 1st October 2007.

Stage two

The minimum of 24 days increases to 28 days (5.6 weeks) on 1st April 2009.

The Employment Rights Act 1996 require employers to notify employees, in writing, of changes to their holiday entitlement.

Practical Tips

The annual leave CAN include bank holidays. It is entirely up to the employer if they wish to give an entitlement greater than the minimum. For example 24 days plus New Years Day, or 24 days plus 2 additional days after 3 years service.
If the Business already give 24 or more days leave, there is no need for any action until April 2009.
If the Business currently gives the minimum entitlement of 20 days including bank holidays and, for example, your leave year runs from 1st January to 31st December you do not need to give employees the additional 4 days immediately. The staff benefit from the additional 4 days for only a quarter of their leave year, therefore they receive a quarter of the additional entitlement ie 1 day.
Some Businesses may have difficulty accommodating the additional leave and meeting client demand. Until April 2009 it is possible to pay staff in lieu of the additional 4 days. This can be paid as a lump sum or more attractively for staff they can select days when they effectively "work whilst on holiday" and receive double pay. This could be attractive in the pre Christmas period.
As mentioned above the minimum holiday can include bank holidays. This issue should be clarified in the contract of employment. There are no rights, in law, for any additional payments for staff who work on a bank holiday.
Part time staff will receive the additional holiday on a pro rata basis. Can I emphasise part time staff do not have an entitlement in law to any form of lieu day for working or not working a bank holiday.
Where the calculation for the additional leave results in a portion of a day the employer is not required to round this up to the nearest whole day.
Until April 2009 you can also agree that staff can carry over annual leave (over the minimum 20 days) to the next leave year. This is subject to the salons agreement and may provide a little time for you to put in place cover for the additional leave.

What should Employers do?

Firstly the salon should advise staff in writing of their new leave entitlement. The new arrangements may be confusing to staff and I would suggest that you detail the new entitlement on a year by year basis up to 2009 when the 28 days comes in to force.

Where you are currently giving only the minimum leave you should consider that by April 2009 the cost of holiday pay for staff will increase by 40%. It is perhaps time to consider whether you are going to restrict which months and days holidays may be taken. Some employers already require staff to take a portion of their leave during quieter periods of the year.

These actions may not be popular with staff and you must be mindful of the need to recruit and retain staff.