Easter’s changing date could force breaches of the working time rules
But employers can take steps to even out bank holiday variations.
The Working Time Regulations 1998 state that workers are entitled to a minimum of 5.6 weeks' paid holiday a year, which equates to 28 days' paid holiday for a full time worker. Of course, an employer may provide more than this if it chooses to.
It is common for contracts of employment to provide an entitlement to 20 days' paid leave per year (or the pro rata equivalent for part-timers) plus bank and public holidays – in other words the public holidays count towards workers' 28 days' statutory paid annual leave entitlement.
There is no right to take paid leave on the actual days on which public holidays fall under the working time regulations. When the leave can be taken is a matter of agreement between the employer and the worker (this is normally specified in employment contracts).
A holiday year which runs from 1 January to 31 December will provide at least eight public holidays but this is not true for holiday years running from April to March, since five of those public holidays fall on different days each year. So an employer whose holiday year runs from April to March could fall foul of its statutory obligation to provide 28 days' paid leave if Easter falls early one year and late the next.
This can create a wide variation. If the holiday year runs from 1 April 2015 to 31 March 2016, the employer can rely on a generous 10 days of public holidays in England and Wales. By contrast, a holiday year running from 1 April 2016 to 31 March 2017 will only provide six days of public holidays towards the statutory allowance.
Where the contract states a worker is entitled to 28 days' holiday (or a pro rata equivalent) inclusive of bank and public holidays there should be no problem. Similarly, where an individual is entitled to significantly more than the minimum, for example, 25 days' holiday plus bank and public holidays, the regulations would not be breached.
However, if a full-time worker's contract states they are entitled to "20 days plus bank and public holidays", they will only be entitled to 26 days for 2016-17 which would be a breach of the regulations. In these circumstances, the employer would need to allow the individual an extra two days’ holiday to comply with the law.
Payments in lieu
Organisations affected by this anomaly for 2016-17 may be tempted to make a payment in lieu of two extra days' holiday, but this would be contrary to the regulations. European law has established that the purpose of paid holidays is to allow workers to relax away from work, for their health and well-being. It is unlawful to 'buy-out' an individual's minimum right to leave except where employment has ended (although this might be possible where a contract is more generous than the statutory minimum).
Since this problem will keep occurring over the years, and because productivity may be seriously affected in years where there are 10 public holidays such as 2015-2016, employers should consider a longer term solution. Rather than unilaterally reducing holiday entitlement in years where there are more than eight public holidays (which would be a breach of contract), they could seek workers' agreement to either:
- change the holiday year
- change the wording of contracts
- carry leave over into the following holiday year (which is not unlawful for the additional 1.6 weeks' leave provided by EU law)
Employers should check what their contracts say and consider their strategy now, before the 2015-16 holiday year starts. With some lead-in time, they may be able to make use of the extra public holidays in 2015-16, perhaps through carry over or some other agreement with workers ahead of time. Consultation with the workers involved will be essential.
Article first published by CIPD.