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A worker's holiday entitlement is regulated by his contract of employment. However, the Working Time Regulations contain provisions relating to annual leave which cannot be avoided by the employer. A worker is entitled to a minimum of four weeks’ paid leave (that is, 20 days if the worker works five days a week).
In the first year of employment statutory holidays accrue at the rate of one twelfth of the number of annual leave days per month, on the first day of each month. Thereafter the worker's whole annual leave entitlement accrues on the first day of each leave year. That does not mean however that a worker can take his statutory holidays when he pleases. This can be regulated by the worker's contract of employment.
An employer may dictate when an employee is to take his leave, provided he gives the worker sufficient notice (twice as many days in advance as the days holiday to be taken) and when he may not take it (the notice required being as many days in advance as the number of days he may not take). The Working Time Regulations provide for a minimum period of notice to be given by the employee (twice the time he wishes to take off). An employer can turn down his request by issuing a counter notice (within a period equivalent to the number of days holiday requested). There is no limit on the number of times this notice and counter notice procedure may be repeated provided the worker is permitted to take his entitlement within the leave year. Statutory holidays may not be carried over and there is no entitlement to pay in lieu of holidays not taken (unless the employment is terminated).
In a recent case, the Employment Appeal Tribunal held that the annual entitlement applies to a "worker", whether or not he is actually working. This means that persons on long term sick leave may give notice of their intention to take four weeks annual leave - and thus become entitled to four weeks pay - even though they may have long since exhausted their entitlement to sick pay.
Sometimes confusion arises about how much a "week's pay" is. A worker with normal working hours is entitled to receive his normal weekly salary. If a worker has no normal hours, there is a statutory formula for calculating a week's pay in the Regulations. In a recent case the Employment Appeal Tribunal held that a weeks pay is the equivalent of a worker’s remuneration for a week's contractual hours and over time hours need not be taken into account, even if over time is normally worked.
When a worker’s contract is terminated in a leave year, he is entitled to be paid in lieu of holidays accrued but not taken. If he has taken more holidays than he has accrued, the employer may recover the excess (whether by a payment or by the employee undertaking additional work or otherwise) only if there is a written agreement to that effect.
This article was written by Karen Harvie of Russel + Aitken.
It is reproduced here with permission.
Every effort has been made to ensure the accuracy of this article as at the date of publication (no area of law changes
faster than employment law). However, it is general in nature and is not a substitute for specific legal advice.
In particular it should be noted that some sectors of workers are excluded from the regulations and that the concept of
"worker" is wider than that of "employee".
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