08 May 2018
Calculating staff holidays and bank holidays isn’t quite as easy as you may think. There are a number of anomalies around where you start your leave year, which could creep in and upset the entire system.
Under the Working Time Regulations 1998 (WTR) all workers are entitled to 5.6 weeks leave per year, which equates to 28 days for a full time employee working 5 days per week. Whilst not mandatory, it is very common for organisations to include bank holidays within this entitlement. Part time staff are entitled to the same leave as comparable full time staff but on a pro-rata basis.
Organisations can set their annual leave year via a Relevant Agreement (usually the Contract of Employment). In the absence of a Relevant Agreement the annual leave year will commence either on 1 October (for workers employed on or before 1 October 1998) or (for all other workers) on the date upon which they commenced employment. This could result in an organisation having completely different leave years for all their workers, which in practice can prove very onerous and difficult to manage. It is therefore very common for employers to specify their annual leave year within the contract of employment. The most popular leave years adopted are January to December, April to March or October to September.
What If a Leave Year Starts at the Beginning of April?
Where a leave year starts at the beginning of April and the annual leave entitlement includes bank holidays, Easter can cause discrepancies in some cases, although this is rare. In 2017, Good Friday fell on the 14 April, however, in 2018 Good Friday fell on the 30 March - meaning that for employers with a leave year of April to March there were 2 Good Fridays. As a result there are fewer bank holidays in the 2018/2019 entitlement. How the additional Good Friday in the 2017/2018 entitlement may have impacted upon your workers’ leave entitlement, depended upon the wording of the contract. If for example, the contract read ‘you are entitled to 5.6 weeks inclusive of bank/public holidays’ then where Good Friday fell on their normal working day, workers would need to reserve an additional day’s leave to cover the ‘extra’ bank holiday. If however the contract gave a set amount of days holiday plus bank/public holidays or plus named bank/public holidays (which included Good Friday), then as the bank holidays are referred to as additional days, workers would have received the benefit of an extra day. In contrast, if the contract limited the entitlement of bank/public holidays to 8 per year then it would be up to employers to determine how to treat the additional day.
This could include notifying staff that they would be required to take annual leave on this day out of their normal entitlement or granting unpaid leave as an alternative. The impact of fewer bank holidays in 2018/2019 entitlement will also depend upon the wording of the contract. Where the contract provides for 5.6 weeks plus bank/public holidays a full time employee working 5 days per week will still be entitled to 28 days annual leave over the course of the leave year. Whereas last year they needed to reserve an additional day to allow for the 2nd Good Friday. So this year they will have more flexibility regarding when to take their holiday as there will be one less bank holiday deducted from their overall entitlement. Where the contract provides for a set number of days leave e.g. 25 days plus bank/public holidays the workers will have one less bank holiday off in the current year - balancing out the additional day received the year before.
The exception to this is where the contract specifies 20 days plus bank/public holidays, or 20 days plus 8 named bank/public holidays (including Good Friday) in this case employers must ensure that workers still receive 5.6 weeks annual leave. In England and Wales where there are normally only 8 bank/public holidays recognised employers would need to allow 21 days holiday in addition to the 7 bank/public holidays to ensure workers still receive the statutory minimum leave entitlement. Employers operating different leave years e.g. January to December would not be impacted by the Easter anomalies.
Despite the occasional irregularity, April to March is still a popular choice of leave year amongst employers and can be preferred to operating a January-December leave year to avoid last minute request to use up the balance of annual leave during a busy festive period.
As you can see, where you start your leave year can throw a spanner in the workers when calculating your employees’ holidays. If you need support with managing holidays or require advice, we can help.
We provide software so you can manage all staff absences online in one easy-to-access place, while also having a team of experts on-hand if you need advice over the phone. For more information call 0808 145 3490.
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