On 1st October 2007 the statutory holiday entitlement will increase from 4 weeks (20 days if you work a five day week) to 4.8 weeks (24 days if you work a five-day week).
A further increase to 5.6 weeks (28 days if you work a five-day week) will take place from 1 April 2009.
If you currently give bank holidays (i.e. someone is paid for a bank holiday and has the day off) this CAN count towards the total holiday entitlement. Therefore if you already give employees 4 weeks (20 days) plus 8 bank holidays then you already provide enough holiday and you do NOT have to take any action.
If you currently provide 4 weeks including bank holidays (i.e. 12 days plus 8 bank holidays or 20 days and do not pay bank holidays), then you will need to adjust your holiday entitlement.
Do I have to give staff bank holidays?
The new law does NOT provide for employees to be given bank holidays. What the legislation does is provide for an increase in the total number of weeks/days given to employees. Provided you give the required number of days/weeks these do NOT have to fall on bank holidays.
CALCULATING NEW HOLIDAY ENTITLEMENT
There are various ways to calculate the new holiday entitlement depending on the way people work.
Set out below are some examples of how to calculate holidays for 4.8 weeks (24 days if you work a five day week) i.e. from October 2007.
What does 4.8 weeks mean?
The regulations express the holiday entitlement as weeks i.e. 4.8 weeks is 4.8 times your usual working week. If you work a five day week, then 4.8 weeks is 24 working days; if you work 4 days a week, then 4.8 weeks is 4 days x 4.8 weeks = 19.2 working days, and so on.
Calculating the holiday entitlement for someone working a regular five day week
For someone working a five day week, 4.8 weeks holiday will simply be 5 days per week x 4.8 = 24 days.
This means that out of the 52 weeks in the year an employee is entitled to take 4.8 weeks off, so will work 47.2 weeks (52 weeks less the 4.8 weeks holiday). The holiday entitlement of 4.8 weeks is therefore 10.2% of the employees total working year (honest!).
Calculating the holiday entitlement for someone working regular shifts
It will probably be easier to calculate the holiday entitlement as shifts. So if a worker works four twelve-hour shifts, followed by four days off (the ‘continental’ shift pattern), then the average working week is 3½ twelve-hour shifts. So 4.8 weeks’ holiday is 4.8 x 3½ = 16.8 twelve-hour shifts.
Calculating the additional entitlement for someone working term-time only or part of the year.
You need to calculate the total hours per year. So if a worker works 40 hours a week for 39 weeks of the year, they work a total of 1,560 hours a year, or 30 hours a week. The holiday entitlement is 4.8 weeks x 30 hours a week = 144 hours holiday for the year.
Here’s the tricky bit - the 144 hours needs to be taken as holiday as part of the 1560 hours. i.e. the 1560 – 144 = 1416. So they actually work 1416 hours and take 144 hours holiday = 1560 in total (if you take 1416 and add 10.2% you come back to 1560).
If they work the full 1560 and take holiday at other times, they accrue or earn holiday on the whole 1560 hours. This is then 1560 + 10.2% = 1719 hours (159 hours holiday for the year).
Confused… join the club!
Calculating the holiday entitlement for someone working casually or working very irregular hours
It may well be easiest to calculate the holiday entitlement that accrues as a percentage and then convert to hours and pay. For example someone who works 10 hours will be entitled to 10.2% holiday’s. Therefore, 10.2% of 10 hours = 1.02 hours (or 61 minutes).
Calculating the holiday entitlement for existing staff for the current holiday year if the year runs 1st January to 31st December
For existing employees who currently get 4 weeks, the new entitlement up to 31st December will be (13 weeks ÷ 52 weeks) x 0.8 weeks = 0.2 weeks. Therefore, for someone working a five day week this will be an extra 1 days holiday (0.2 x 5 days per week = 1 day).
Calculating the holiday entitlement for existing staff for the current holiday year if the year runs 1st April to 31st March
For existing employees who currently get 4 weeks, the new entitlement up to 1st April will be (26 weeks ÷ 52 weeks) x 0.8 weeks = 0.4 weeks. Therefore, for someone working a five day week this will be two extra days holiday (0.4 x 5 days per week = 1 day).
Calculating the holiday entitlement for someone who starts working mid way through a leave year
If an employee started working after 1 October 2007 their holiday entitlement for the first leave year would be calculated by multiplying the proportion of a full year that they worked by 4.8 weeks. For example, if a worker joined a company with 32 weeks left in the leave year, their holiday entitlement would be (32 ÷ 52) x 4.8 weeks = 3.0 weeks.
If they started working before 1 October 2007, their holiday entitlement for the first year would be the proportion of a full year that they worked, times four weeks, plus the proportion of a full year that they worked after 1 October 2007 multiplied by 0.8 weeks. For example, a worker starts work on 3 September 2007, and their leave year ends on 31 December. Their holiday entitlement is (17 weeks ÷ 52) x 4 weeks = 1.31 weeks, plus (13 weeks ÷ 52 weeks) x 0.8 weeks = 0.2 weeks, giving a total holiday entitlement of 1.51 weeks.
Calculating the holiday entitlement for someone who leaves an employer mid way through a leave year
If an employee left the employer after 1 October 2007, their holiday entitlement on leaving would be the proportion of a full leave year that they worked, multiplied by four weeks, plus the proportion of a full leave year they worked after 1 October 2007, multiplied by 0.8 weeks.
For example, a worker leaves an employer on 28 December 2007, and their leave year runs from 1 April to 31 March. Their holiday entitlement is 4 weeks x 39 weeks [the number of weeks from 1 April to 28 December] ÷ 52 = 3 weeks, plus 0.8 weeks times 13 weeks [the number of weeks from 1 October to 28 December] ÷ 52 weeks = 0.2 weeks, giving a total holiday entitlement of 3.2 weeks.
Any holiday they had already taken in the final leave year would then be subtracted from this total entitlement.
OTHER QUESTIONS
Additional holiday entitlement extended to agency workers
All workers covered by the Working Time Regulations are entitled to the increase in holiday entitlement. This includes agency workers and casual workers.
Additional holiday entitlement includes time off for bank holidays
Time off for bank holidays can be counted as part of a worker’s annual holiday entitlement.
Part-time staff who don’t work on days on which bank holidays fall
The increase should be pro-rated for those working part time (regardless of what days they work). So if a member of staff works four days a week in a leave year beginning on or after 1 October 2007, they will be entitled to 19.2 days (4 x 4.8). If they work three days a week they will be entitled to 14.4 days (3 x 4.8). Part-time workers are entitled to 4.8 weeks’ holiday, based on the hours a week that they work, regardless of whether they work on days on which bank holidays fall.
Pay in lieu of Holiday
Under the WTR, annual leave may not be replaced by a payment in lieu, except on termination of employment.
However, between 1 October 2007 and 1 April 2009, employers can pay in lieu of the extra 0.8 week. This is a temporary measure to help employers manage transitional arrangements such as recruiting extra staff or providing extra training. After 1 April 2009, payment in lieu of accrued untaken holiday can only be made on termination.
