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Every manager up and down the country will have had to deal with holiday requests from their workforce, and sometimes this can be very frustrating to handle. Can you refuse your employees from taking certain holidays? What happens if an employee is sick whilst on holiday? What do you do if several workers want holidays at the same time? In this webinar I discuss everything you need to know about issuing holidays to your staff.
Amanda: Good morning, everybody, hello. Welcome to my webinar today. It's Tuesday, 3rd December. Today's webinar is all about everything you need to know about holidays, part of the Working Time Regulations, as you know, and we'll talk about that.
I'm Amanda Chadwick. I'm a speaker on behalf of Peninsula Business Services, Limited. We currently integrate ourselves within 27,000 businesses throughout the UK. We're a family-run firm and we help employers manage and make sure, control and manage employment law, to make it work for them, within their businesses, and so they don't end up in tribunal. But if they do, we also provide help and assistance with that, as well.
Okay, the introduction. The Working Time Regulations '98, as amended, make various provisions applicable to workers, which govern working time and holidays. These include provisions with respect to maximum weekly working hours, night work, daily and weekly rest periods, rest breaks, and minimum paid annual leave. The definition of worker is not confined to those working under contract of employment, i.e., employees. It also includes all those who are paid for carrying out work in person, and who are not in business on their own accounts, such as casual staff and agency workers.
So, just to let you know, we'll recap here, but, you know, holidays are part of the Working Time Regulations, and they're hot on this. This is the biggest topic in tribunal, the Working Time Regulations. So that's the introduction.
Don't try to take notes, here. What I will do is upload this recording later onto YouTube, and you will have access to slides, as well.
So, quick breakdown. In general, the Working Time Regulation provides rights to a limit of an average 48 hours a week, are the hours a worker can be required to work, though individuals may choose to work longer by opting out, 5.6 weeks' paid leave a year, 11 consecutive hours' rest in each 24-hour period, a 20-minute rest break if the working day is longer than six hours, and one day off each week. A limit on the normal working hours of night work is to an average of eight hours in any 24-hour period, and an entitlement for night work is to receive regular health assessments.
There are special regulations for young workers, which restrict their working hours to eight hours per day and 40 hours per week. The rest break is 30 minutes if their work lasts more than 4½ hours. And they're also entitled to two days off each week. So, it's handy to know one and two days off. Big difference, there. Also, you are responsible for knowing of any other work that people do, so adding those hours together, that's your job, and so we always recommend, we always put it in our handbooks, a term and condition that says, "Let us know if you're working elsewhere." Especially with young workers, because their breaks are condensed.
Any proposals to change patterns of working are best carried out in a consultative way. Explain the reasons behind such a move and the benefits which may accrue to both the organization and the worker. So that was a quick breakdown of what the Working Time Regulation provides.
So, the government agencies for the Working Time Regulations, these are people who are responsible for the holidays. The Health and Safety Executive is responsible for the enforcement of the maximum working week, working time limit, night work limits, and health assessments for night work. Just remember, the Health and Safety Executive does not, however, enforce time off, rest-break entitlements, or paid annual leave entitlements.
Before the 1st of October 2007, it was four working weeks. There will still be some people who are working to this. First of October 2007, it went to 4.8 working weeks. And now, 1st of April, what people are entitled to, this is a full-time worker, is 5.6 working weeks. You may pay above that. To calculate an employee's holiday entitlement, multiply the number of days they work a week by 5.6. For example, if you work a five-day week, you would be entitled to 28 days annual leave a year, that's 5 days times 5.6 weeks; it equals 28 days.
So, public and bank holidays, there is actually no statutory entitlement to be paid leave for public and bank holidays. There's nothing in law that says that. So even if you're thinking, "Oh, banks are entitled to it." Actually, there's no legal entitlement to bank holidays. It all depends on what's written into somebody's contract. A high percentage of our clients like to include them within the 5.6 week entitlement, which they're well within their rights to do.
As I said, most of our clients actually include their holidays; they put the bank holidays into it. And a lot of our clients have had help in changing that, as well, and making it so that the holidays actually include the bank holidays. Reasons for this, especially with part-time workers, is where you have problems where somebody works a Monday, and they're part-time, they both do Tuesday, Wednesday, another person works a Thursday, Friday. And then, you know, they only share the Wednesday. So they work exactly the same hours, anyway, but the person working the back-end of the week is not happy, because the person working the first end of the week actually has the holidays the same as that person, but the bank holidays, as well.
And that's really an admin error. I would suggest that bank holidays are included into somebody's annual leave. It makes things much simpler.
So, part-time workers – remember, this is really important – part-time workers should be treated no less favourably than an equivalent full-time worker. This means that if the client gives extra days off to full-timers, they should give extra time off to part-time workers, as well. Pro rata'ed, of course – remember that. A lot of companies that we help make mistakes and bring us in to sort out their mistakes. And one of them is, when the law changed, where part-timers get exactly the same rights as full-timers, what they did is they awarded all their part-time workers exactly the same holidays as a full-time person. So imagine the cost to the business. So, obviously, we have to go in and help people rectify their mistakes, which we did do.
So: "The carrying over of annual leave and payment in lieu." Holiday entitlement, over and above four working weeks, can be carried over into the following leave year, with the relevant agreement. So, the point here is that under the Working Time Regulations and Guidance on somebody's health and working hours, you shouldn't be letting people carry over any holidays from their statutory minimum, okay?
And it's not a bad thing at the start of any holiday year, anyway, to remind people that they shouldn't book holidays without prior agreement from their manager that they can have them. And I think it's a good idea, at the beginning of any holiday year, that people should be reminded of that. And then they can't say later on, "Oh, I didn't know that what you were going on about." "So, holiday requests will only be considered if you present them on a Holiday Request Form. And we will then allocate agreed holiday dates on a first-come, first-served basis to assure operational efficiency," if you like, so your minimum staffing levels are maintained through the year.
You should also write into your Holiday Request Forms that people should give at least four weeks' notice of any intention to take holidays, and one week's notice is required for odd days. And also, what you might want to include in there, because it can alter people's businesses: you may not normally take more than two working weeks consecutively. And the holiday pay will be paid at normal, basic pay.
Also, it is well within your rights, as an employer, to say to your staff that they have to reserve part of their holiday entitlement to take during the Christmas or New Year period. If it's quiet for you, as a business, be careful not to say it's a holiday period, just to say that it's a quiet period. Because there are 85 recognized religions in the UK.
"If they haven't accrued sufficient holiday entitlements to cover this period, they will be given unpaid leave of absence." And you've got to write that into your holiday entitlement and conditions.
And also, what you should mention in your Holiday Request Forms is, in the event of termination of employment, any holidays accrued but not taken will be paid. However, in the event of somebody taking too many holidays than they've accrued, then the holiday payments will be deducted from their final wages or salary, and making sure that this is an expressed, written term of the contracts of employment.
Again, you should mention things about being dismissed on the grounds of gross misconduct, any holidays accrued in excess of the statutory minimum will not be paid. And then, also, just to mention again, holiday entitlement will accrue in accordance with your contractual rights during periods of sickness and absence. You would also, in your Holiday Entitlement and Conditions, mention when the holiday year begins, and also when it ends.
And also, it is mentioned that their personal holiday entitlement is shown in their individual statement of Main Terms of Employment, which is what you issue them when you offer them the job. Then what you would say is you would just give them a copy of the Holiday Request Form; you'd mention when they could and couldn't take a holiday. You're well within your rights to do that. And also that you can give them double the amount notice if you have to make them take a holiday, you might want to write that in there, as well. And also that you're committed to ensuring that employees receive opportunities to take leave up to at least the legal minimum, and comply with the Working Time Regulations. And it's just, you know, it's making sure you've ticked all the boxes and you've covered it. And making sure that you manage holidays throughout the year.
So, going back to carrying holiday leave over, holiday entitlement over and above four working weeks can be carried over into the following leave year, with a relevant agreement. It should be noted that payment in lieu of any part of the holiday entitlement in these circumstances is not allowed. However, the Employment Tribunal has handed down its decision, in the Lyons v. Mitie Security, which is authority for the proposition that this Rights of Statute Leave, in Regulation 13 of the Working Time Regulations is not inalienable. Statutory or contractual notice requirements could correctly operate, so as to result in the loss of the right to leave at the end of the year leave, in respective leave not taken. However, beware of long-term sickness, here.
So, basically, the EAT confirmed that leave not taken at the end of a leave year can be lost by workers, provided the employee has not applied any notice per requirements, requesting annual leave in an unreasonable way, so as not to deny requests. So, basically there – because it's always spoken in legal language, isn't it? – basically, what they're saying is that if you haven't taken your holidays within a year, and we've given you every opportunity, we've actually said to you that we've not got any unreasonable way that you can't take them. We haven't had too much work, and, you know, we've proved that we've managed it. And you haven't taken the holidays, then, you know, they can actually be lost.
But what I would say to you is be very careful of this. People quickly change their minds here. So part of the Working Time Regulations says that you have to manage your staff's health. So I would, as a good employer, make sure that people are taking the holidays, and reinforcing it. So if my holiday leave year starts in January, I would ensure, I would keep on top of it and say, "Look, have you booked your holidays, yet?" And then, in February, making sure, so that, come September, somebody's not left with, like, five weeks of holidays to take.
So, consequently, it is okay to refuse holiday requests, which have not complied with their notice requirements, where they have a genuine business reason for refusing, rather than being merely pig-headed, petty, or vindictive, even if it means the employee loses some of their statutory entitlement.
So, issues to consider with holidays. April to March leave years. Where an employer has an April to March leave year, it is essential to check what the contract states before calculating holiday entitlements. If the contract states holidays are inclusive of public and bank holidays, it is fine to calculate as normal, i.e., the 5.6 times working days. Where the contract states, public/bank holidays are in addition to the four working weeks' holiday, the employee needs to be aware to check when public bank holidays fall, as Easter can fall before and after the 31st of March, each year. Bet you didn't know that one.
This means, in one year, an employee can receive ten bank holidays, where two sets of Easter fall in the same year, and the following year, only receive six, and therefore would fall below the statutory minimum holidays. In these cases, the employer would need to give an additional two days' holiday to bring employees in line with the statutory minimum. I think you're following me, there, aren't you?
So, issues to consider with holidays, again. Condensed working week. For employees who work a condensed working week, i.e., full-time hours over four days, it's best to calculate holidays in hours. A lot of employers, now, are actually calculating holidays in hours. For example, an employee works 37½ hours over four days. That's 37.5 times 5.6, equals 210 hours holiday.
However, the employee must always check how holidays are expressed in the contract. Holidays would need to be expressed either as 5.6 working weeks, or 28 days, pro rata for part-time employees, and those working full-time hours, on a condensed-week basis.
So issues, again, to consider with holidays, the six-day week workers. The new increases provide for a cap of 28 working days to be applied to the 5.6-week entitlement. This affects 6-day week workers who, without the cap, would be entitled to 33.6 days' holiday. However, the cap must be provided for in the contract, so the contracts need to be reviewed, so make sure you've got this written down. If the contract simply provides for 5.6 weeks' entitlement, clients would be required to give the full amount of 33.6 days' holiday. So be aware of this, because you could actually be paying a certain amount, so just write something into the contract that says there is a cap of 5.6 a working week, and the cap on the holidays.
So, issues to consider, continued. Workers pay varies with amount of work done. Where the worker's pay varies, week to week, for example, where workers are paid a wage per hour, and have variable hours of work each week, holiday pay is calculated as the average earnings over the previous 12 weeks.
For example, a client provides us with the following information of the hours worked over the previous 12 weeks, 283/12 equals 23.59 hours per week. Where there is any week in which no pay was due for hours worked, you should look back past the previous 12 weeks for the next, previous week in which work was done, and count those hours. Therefore, only take into account the previous 12 weeks in which work has been carried out.
So, here are some questions I've had, as well, because people are asking me all the time, "Do holidays accrue during sickness?" Well, I don't know if you know, it was well publicised. Part of the recent ECJ ruling on Stringer versus HMRC, the short answer, really, is "yes". Employees do accrue holidays during sick leave. However, a string of cases dealing with employees on long-term sick leave has altered the position slightly on how much is accrued, and whether this can be carried over to new, annual leave years.
The cases confirm that employees on sick leave should be allowed to carry over any outstanding leave to the next holiday year, if they've been unable to take it, due to sickness. And that holiday accrued while on sick leave could also be carried forward to the next leave year, if the employee was unwilling to take it in the leave year in which it accrued.
But the question of just how much leave can be carried over has been left unanswered. In the latest case, Healy worked for Sood Enterprises as a handyman and car wash attendant. He was entitled to 28 days' leave a year. He suffered a stroke and went on sick leave in July 2010. And following a long period of sick leave, resigned on 6th of June 2011. His sick leave straddled two holiday years. He claimed he should be paid for 17 days' holiday in 2010; he'd already taken 11 of the days, and 14 days' holiday in 2011, his pro rata entitlement up to the date of his resignation.
Therefore, we've got key points to remember here. Workers accrue for weeks' holiday per year throughout any periods of sickness absence. Workers must be allowed to take this holiday, if requested, on their return to work. If the worker is off sick and their time off straddles two leave years, they cannot carry over the additional 1.6 working weeks' annual leave entitlement, okay? So four, plus 1.6 is 5.16, to bring us to what people are entitled to.
However, watch out for contractual right, here, to carry over any contractual holiday, as expressly set this out in sickness, absence, or maternity policies, for now. Just be careful of what you've got written down, so make sure you just double-check that.
So, agency workers and holidays, this is another question I always get. Are agency workers entitled to holidays? First, what we need to do is establish whether our client is an employment agency or an employment business. Employment agency is where our client finds permanent positions for the workers with other employers. The worker is then paid by the company our client supplies workers to, and our client is not responsible for providing annual leave. The responsibility falls with the company taking the worker on.
However, employment businesses, where our client takes workers on and finds assignments for them, are generally known as "temporary agency work" or "temping". The worker is paid by our client, the temping agency, or employment business. Our client has to pay the worker, even if the hiring company has not paid our client. And the client cannot charge the employee for finding work.
Although there are some exceptions, if they are, for example, looking for work in the entertainment or modelling industries. In these cases, the worker would be entitled to holidays from our client, and would be calculated as normal. So, if you're interested, the Agency Worker Regulations 2010 Act, which provide for equal treatment when compared to permanent employees of the hirer in relation to annual leave after 12 weeks' service.
So, irregular working patterns and holidays. How do I calculate holidays for casual or irregular working patterns? I am not a mathematician; this is a mathematical equation, here. If a worker works casual or irregular hours, it may well be easier to calculate the holiday entitlement that accrues, as it accumulates, as hours are worked. The holiday entitlement of 5.6 weeks is equivalent to 12.07% of the hours worked. In case you're wondering how we work that out at Peninsula, or how we work out the 12.07% figure, this is how it works out.
You've got your 5.6 weeks' holiday, divided by 46.4 weeks, that being 52 weeks minus 5.6 weeks, multiplied by 100, which gives us 12.07%. The 5.6 weeks have to be excluded from the calculation, as you would not be present during the 5.6 weeks, in order to accrue the annual leave. For example, if you had worked ten hours, you would be entitled to 72.6 minutes paid holiday. That's 12.07% times ten hours, equals 1.21 hours, or 72.6 minutes.
Remember, you know, I know you're thinking, "What? This is a funny equation." Remember, these slides are available later on, to recap. It takes a while with some people – I'm one of them – where we're doing equations, we're working it out, to digest it. So, I know that that's the same for lots of other people, so don't be worried if you don't get it straight away. The slides will be available on YouTube, later on, so you can recap on there.
But remember, the 46.4 weeks, that's a figure we get to by taking the 5.6 weeks' holiday entitlements away from 52. Okay, 52 weeks being in the year; 5.6 weeks being what they're entitled to. We take that away, because it shouldn't be included in the equation, and that's where we get the 46.4 from, okay? So, and then, you know, and as I said, that's for the hourly rate. The holiday entitlement is just over seven minutes for each hour worked, for the last equation.
So, I have an employee who has just come back from holiday, who says he was sick for three days during the holiday. Can he now take these three days' holiday at another time in the year? Well, whilst the basic holiday entitlement is set out in legislation, some day-to-day issues that arise from the way annual leave works in practice are not always clear. The issue of an employee's future entitlements for annual leave, where they have been sick during an allocated period of holiday, has risen a number of times.
You heard me talk a minute ago on relevant case law, and it can be considered in this situation. The Court of Justice of the European Union has recently ruled in separate judgments that if an employee becomes sick just before or during their holiday, the employee can ask to convert the period of holiday where they were sick from annual leave to sick leave. Sick leave will obviously attract sick pay and not holiday pay. The employee will then be entitled to take the missed annual leave at another time.
In order to convert the annual leave to sick leave, employees must follow the normal procedure in place for telling the employer that they're unwell. So that's sick notes etc., so you might want to write something in your handbook about this. This would normally consist of informing the employer immediately, and providing medical certificates. But the process outlined in the employee's Contract of Employment or Staff Handbook should be consulted and followed.
If, due to illness, an employee is unable to take all of their holiday entitlement during a particular leave year, the employee is entitled to carry forward that period of holiday to the subsequent leave year, which we spoke about earlier on. Where an employee's employment ends after being on long-term sick, any annual leave to which they're entitled, from the current leave year, or carried forward from a previous leave year, can be afforded to the employee, as payment in lieu of holiday.
This may carry some restrictions, including whether the employee returned to work and had an opportunity to take leave before employment ended, as well as potentially being limited to only the four-week minimum required by the EU, and not the extra 1.6 weeks added by the UK government, since 2007.
So another question was, "What happens when employees book the same days off?" This is a very common occurrence. With your staff having a legal requirement to at least 5.6 weeks' annual leave per year, it isn't surprising that you might sometimes come across the situation where staff request holidays at the same time. If you have sufficient staff to be able to absorb simultaneous absence, then multiple requests will not cause you a problem. But small businesses may not be able to cope.
Having policies and procedures in place from the start will help you deal with this situation. It is a legal requirement that employees are given a statement of Terms of Employment. You heard me talk about this yesterday. The penalty, if not, is £1,400, on average. And this statement must contain details of annual leave entitlement. It is good practice to also set out the company rules on requesting holidays, including any measures you take to ensure that you are not left with too few staff.
Most companies run a first-come, first-served annual leave booking system, which would seem to be the fairest. Some companies temper this with the restriction on booking annual leave until the start of the annual leave year in question, which prevents people booking leave two years in advance, for example. And some people are canny enough to do that.
So, your procedures will be stronger if they contain wording to point out to staff the reasoning for any refusals you might make. This way, staff will know in advance that, for example, maintenance of operational efficiency, and appropriate staffing levels will also be considered before approving a holiday request. And that they may expect that not all requests will be granted.
Even without such a procedure, you can refuse requests for time off. You should remember that the employee is making a request for time off, which then awaits your approval. You are entitled to say no if the company's genuine interests will be compromised, i.e., there will not be enough staff to run efficiently on that day, when you are refusing a request.
You should remember that you need to give notice of the refusal that is equal the amount of time requested. This means that if two days' leave has been requested, you must give at least two days' notice that you will not permit the leave to be taken.
Formal annual leave requests and recording procedures will make it easier for you to identify where there are request clashes. Keeping all requests and records in one place will make for an efficient way of knowing who has had a request granted, and for which days.
Do you know what? A happy workforce is a great workforce. You hear me say that all the time. It's about letting your staff know, so there are no surprises later on. Don't book your blooming holidays until I've authorized them, end of, and that is it. Okay? Don't be coming in, saying, "Oh, my husband's booked a surprise weekend away." And I know that, you know, in most cases you're lying through your teeth. There is a procedure; I'm going to constantly remind you, there is a procedure. Do not book holidays until I've authorized that you can have that particular time off.
Well, here we go. You have to decide whether or not you want this employee to return, and if you want to agree to this request. The choice is to either agree to this, which will keep the contract in force, or to bring the contract to an end. This ultimately comes down to whether or not you want to hold this position open for them for three months. If you want the employee to return, and you think that you're able to cope without them for this period of time, possibly by arranging a temporary replacement, then you can agree this between you.
Your employee is employee is entitled to be paid for their time away, for any portion of this time that is covered by the annual leave entitlement. Any additional time off is unpaid leave, unless you come to some agreement to pay extra on a discretionary basis. If you agree to a temporary cessation of work, then the contract continues as normal, and they return to work on the agreed date.
If you are not able to agree this break, then you need to tell your employee that, and be clear about what you are saying. Explain to the employee that you can't hold their job open, so they will have to resign if they no longer wish to be bound by the contract. Tell them that they can contact you on their return, and you will see if you have a suitable vacancy for them. But you cannot guarantee that you will be able to rehire them, so there should be no expectation on their contract continuing.
This is such a common question. Lots of people go travelling now, take time out of their business. And certain employers can't wait. And also, when people do go travelling, generally, they stay longer than their three months. So I think, in most cases, lots of people just cease their contract, and then bring another employee in, and advertise the job as if it is an ordinary vacancy.
I hope that I've helped you today. Now, managing holidays has always been a big issue, and time off and requests of leave. I don't know if you know, but I have spoken about it before on my webinars, but we have a fantastic app that is available to go on your smartphones, on your laptops, etc., that you can access while you're sat on a beach somewhere. All you need is Wi-Fi; there's no set-up. And what you can do, it's brilliant; it's called HR Online. We have a free 28-day trial at the moment. And, basically, people could be just requesting a holiday, and you get the request through on your smartphone today, and then you just acknowledge it. You can say, "yes," you can see who's off, who's here, how many holidays people have got left. You can manage staff, sickness, absenteeism, and holidays. It's absolutely brilliant, I have to say; in times of paperwork and hassle, the HR Online app is blooming fantastic.
Now we do have a free 28-day trial at the moment. No obligation there at all. If you're interested in that, give us a ring, actually, on 0161 827 9915 to find out more on the HR Online. It's Cloud-based technology; we spent a long time designing it, and working on it. And the feedback from the users of it, and lots of them in HR are saying it's absolutely fabulous. And it helps them do their job much more quickly and swiftly, and it's much easier for them. They just carry their phones around in their pockets, anyway, so they can actually authorize holidays with the touch of a button. You can access on your laptop, as well.
I hope you've enjoyed my webinar today, on holidays. It was a bit of a formal webinar, not much fun, here. If you want to access any of my previous webinars, or recordings, they are available on YouTube. It's www.YouTube.com/pbspressoffice. This one will be uploaded later, so give me a chance to put it on there.
If you'd like to attend any of our pension events, or you'd like me to host an event for you, where we actually, or our clients, host events for you at our cost. And that's what Peninsula pays me for; contact me at Amanda@Peninsula-UK.com. If you'd like any editorial written, or you'd like my email to feature on your websites, to answer questions on your behalf, feel free to contact me about that as well.
If you'd like some advice, and you're a non-Peninsula client, please try to give us a call, or email me. That's absolutely fine; you've listened to this webinar, today. But remember, in all correspondence, to quote the webinar number 0026.
I do hope you've enjoyed today's webinar. For all Peninsula clients that are listening, remember, we're there with you every step of the way, through employment law, from writing adverts, to helping you work out your job specifications, job descriptions, your statement of main terms, from writing your policies, procedures, keeping updated, and helping you through any situations you have, and assuring you for them.
If you have any issues, you want any updating on any contracts, remember to use the Advice Line. That's what we're for; I want you to use it. Do not sit there struggling to write a policy when you're paying us to do that for you.
We're there to offer you the reassurance and peace of mind that your business is protected through any outstanding issues that you have in employment law, and also health and safety.
Thank you very much for listening to me today, and I hope to speak to you again, soon. It's goodbye from me.