The extended entitlement to statutory annual leave

01.01.07

The extended entitlement to statutory annual leave

When will workers receive the additional holiday entitlement?

In terms of the Working Time (Amendment) Regulations 2007 the current 20 day statutory annual leave entitlement for full-time workers is to be increased to 24 days on 1 October 2007 and then to 28 days on 1 April 2009.

Does this include public holidays?

There is no new right to take time off on any specific public holiday. Employers do not have to allow workers to take the new statutory holiday entitlement on bank and public holidays and may require workers to use their additional days at other times.

If a contract of employment provides an entitlement to "statutory holidays plus bank/public holidays" how many days' holiday is the worker entitled to?

Many contracts of employment provide an entitlement to "statutory entitlement plus public/bank holidays". In terms of this contractual wording, an employee's holiday entitlement would increase to 32 days (24 statutory plus 8 public/bank). However, the Regulations specifically deal with this situation so that employers who, as at 1 October 2007, contractually provide all their workers with at least "statutory entitlement plus public holidays" (28 days' annual leave) need not provide workers with additional statutory leave under the new rules. This is provided that there is no provision for payment in lieu of the additional 8 days other than on termination and that it cannot be carried forward beyond the next leave year.

Is there an easy way to calculate the increased entitlement for workers whose leave year does not start on 1 October?

From 1 October 2007 until 1 April 2009, the additional leave entitlement will be calculated pro-rata for workers whose leave year does not begin on 1 October. This can be a complicated calculation and the Department for Business, Enterprise and Regulatory Reform (previously the DTI) has provided a holiday entitlement ready reckoner at www.dti.gov.uk/employment/holidays/page40455.html

In some circumstances, workers will be entitled to part days' holiday. There is no requirement in the Regulations to round up entitlement to the nearest half or whole day, although it may be easier administratively to do so. Holiday entitlement cannot be rounded down to the nearest full day. For example, if a worker is entitled to 22.4 days' holiday, the employer could choose to increase it to 22.5 or 23 days but could not round it down to 22.

Can employers pay in lieu of the additional statutory holiday entitlement?

Until April 2009, employers may make payments in lieu of the additional 4 day entitlement introduced on 1 October 2007. After April 2009, as with the current 20 day statutory entitlement, the extended leave may not be replaced by a payment in lieu except where a worker's employment is terminated. Employers who currently offer payment in lieu of holidays will only be able to continue to do so in respect of contractual holiday entitlement in excess of the new increased statutory entitlement.

Are there any circumstances in which leave can be carried over into the next holiday year?

In contrast with the current 20 day statutory entitlement, the additional entitlement of 4 (then 8) days may be carried over into the following leave year. This is not a right workers can insist on but must be agreed in terms of a "relevant agreement" (collective agreement, workforce agreement, contract of employment or other written agreement between the employer and the worker).

Do workers require to be notified of the changes?

Employers whose employees' leave is increased owing to the new rules will be obliged by the Employment Rights Act 1996 to provide those employees with written notification of the change. The DBERR advises that employers do not need to re-issue contracts but need to inform staff in writing, either through a letter or by a statement in payslips etc.

Further information from the DBERR can be found at http://www.dti.gov.uk/employment/holidays/faq/index.html

We would be happy to answer any queries you might have on the changes to statutory holiday entitlement, to assist with the drafting of letters to employees or to advise on any required amendments to contractual holiday provisions.