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• Changes to Statutory Holiday Entitlements for All Workers

Introduction

The draft Working Time (Amendment) Regulations 2007, which increase the statutory paid holiday rights of all employees, have now been published. They come into effect on 1st October 2007.

The Main Change

In accordance with the Government's manifesto commitment that workers would receive paid time off for public holidays in addition to their existing rights to four weeks' holiday, the 2007 Regulations amend the Working Time Regulations 1998 to increase the annual leave entitlement for full-time workers from four weeks to 5.6 weeks, giving those workers who work five-day weeks the right to an additional eight days' paid leave a year.

This essentially means that employers will no longer be able to include the eight UK Bank Holidays within the 20 days' paid leave that they must currently provide.

This will be pro-rated for part-time employees.

How the Changes will Work

Under the new rules:

• Workers will become entitled to an additional four days' paid holiday per year from 1 October 2007;

• Workers will become entitled to a further four days' paid holiday from 1 April 2009, taking them up to 28 days in total;

• The maximum statutory holiday entitlement is capped at 28 days, although employers may of course give more contractual holiday than that;
• Payment in lieu of the initial additional four days' paid holiday will not be allowed after the initial transitional phase ends on 1 April 2009; and
• An "appropriate agreement" (such as an Employment Contract) may provide that the additional leave entitlement may be carried over into the next holiday year;

What if I already give my employees 28 days' paid leave (including Bank Holidays)?

These new rules will not apply where employers already meet the full requirements of the regulations as at 1st October 2007 - ie where they already give the equivalent of 28 days' paid holiday (without payment in lieu, except on termination), and their workers can carry untaken days over for no more than one year - and will continue to do so.

When do the additional days need to be taken?

Although the additional eight days are designed to ensure that workers receive paid time off for public holidays in addition to their right to four weeks' holiday under the Working Time Regulations 1998, there is no obligation to allow workers to take these additional days on the public holidays.

This means that employers can still include Bank and Public Holidays within the total of 28 days which they must provide, or (where more appropriate to their particular business needs), can require employees to work the Bank and Public Holidays and take the additional eight days leave at another time.

It should be noted that, although the new regulations will apply in Scotland, where they have nine public holidays, there will still only be an entitlement to eight additional days' leave.

What effect will these new rules have on my Contracts of Employment?

Employers will have until 1 st October 2007 to decide whether to bring themselves within the scope of the exception (see above).

Specific terms within their contracts of employment may need to be addressed. For example, employers who currently state that employees are entitled to statutory and bank/public holidays in addition to their basic 20 days may need to amend their Contracts to ensure, where appropriate, that it is clear that the new 28 days' statutory leave includes all statutory and bank/public holidays, so that employees cannot claim that they are entitled to a total of 36 days' holiday.

What does the "Statutory Cap" mean?

The regulations have capped the statutory leave entitlement at 28 days. This will be the same for all workers, so (for example) people who work for six days a week and who are currently entitled to 24 days' holiday will still only be entitled to a total of 28 days' holiday after 1 st April 2009.

How do I Calculate Increases to Holiday Entitlements where the Holiday Year does not start on 1 st October?

The increases taking place in October 2007 and April 2009 will be calculated proportionately depending on when the employee's holiday year starts. The Government is intending to make an online calculator available for these purposes.

Ashfords is regulated by the Solicitors Regulation Authority. The information in this article is intended to be general information about English law only and not comprehensive. It is not to be relied on as legal advice nor as an alternative to taking professional advice relating to specific circumstances.