1. Is a part-time employee entitled to bank holidays that fall during their non-working days?
A part time employee who does not work on Mondays will be disadvantaged if they are only permitted paid time off for bank holidays that fall on days when they would normally work.
The simplest way to achieve equality in this situation is to give part-time workers a pro-rated entitlement to all public holidays. For example, if an employee works three full days each week, they would be entitled to three-fifths of the normal bank holiday entitlement for a full-time employee, which amounts to 4.8 days.
2. Can you make a part-time employee use up part of their holiday entitlement on a bank holiday Monday if they don’t work on Mondays?
An employee in this situation could argue that they cannot be made to take statutory holiday on a day that they would not otherwise be obliged to work under their contract, relying on Sumsion v BBC (Scotland). In this case, the EAT suggested that statutory annual leave cannot be taken on days on which workers are not obliged to make themselves available for work.
3. How do you calculate holiday entitlement for a full-time employee who works compressed hours?
For an employee on compressed hours (for example, working a 40-hour week over four days instead of five days), it is usually easier to calculate the annual holiday entitlement in hours. In this case, the annual holiday entitlement would be 40 hours x 5.6 weeks = 224 hours. Rather than taking a day’s holiday, the worker would take the number of hours that they would have otherwise worked on that day, which in this case would be 10 hours’ holiday, for each day otherwise worked. This is in line with the recommended approach taken by the government’s holiday entitlement calculator.
4. What about bank holidays for an employee working compressed hours?
It is a similar position to that of any other employee who does not work five days per week. Although an employee working on compressed hours is not part time, a sensible approach is to deal with this as if they were. The normal approach for a part-time worker is to express their full annual leave entitlement in their contract and state that this is inclusive of any recognised public holidays which fall on a normal working day. Their pro rata entitlement to Bank Holidays is built into the total annual leave. The same applies to compressed hours. Although the overall number of days holiday may appear reduced, the total number of hours and total annual holiday pay is identical to a full-time employee working “normal” hours.
5. What happens if an employee is unwell whilst on holiday – can they reschedule the affected statutory holiday?
Following the ECJ’s decisions in Pereda and ANGED it is likely that employees are entitled to reschedule up to at least the four weeks’ leave contained in regulation 13 of the Working Time Regs. 1998 (WTR), where it is sickness-affected.
The main issue is whether the individual would have been fit to work in light of their sickness, as opposed to suffering an injury or ailment that merely affected enjoyment of their holiday.
If an employee complains that their holiday has been affected by sickness or injury there are two options, namely to either reinstate the holiday entitlement for the affected days or to refuse to allow this at seek to argue that the WTR do not oblige it and risk a claim. To minimise abuse (which is less likely where workers are only entitled to statutory sick pay), consider obliging employees to report sickness on the first day, and requiring medical evidence and holding return to work interviews as well as limiting contractual sick pay where the worker falls ill during holiday; for example, by withholding contractual sick pay unless medical evidence (over and above self-certification) is produced. This approach is likely to require changes to contracts of employment.
6. Is it necessary to include voluntary overtime when calculating the amount of holiday pay?
Following the EAT’s decision in Bear Scotland and the Court of Appeal’s decision in Lock, statutory holiday pay for the Regulation 13, 4 weeks’ holiday under the WTR must be based on “normal remuneration”, which must include payments linked intrinsically to the performance of the tasks which the worker is required to carry out under their contract of employment. Payments such as commission and compulsory overtime must usually be included in the calculation and the default pay reference period for calculating the average weekly holiday pay is now 52 weeks.
Following a number of cases concerning voluntary overtime, provided it has been paid over a sufficient period of time on a regular or recurring basis, the consensus is that it needs to be included in this calculation of holiday pay. This is on the basis that elements of pay that are sufficiently regular or recurring to qualify as “normal” must be included. Payments for work which is normally undertaken should not be excluded as a matter of principle because it is voluntary.
In Dudley Metropolitan Borough Council v Willetts, the EAT held that voluntary overtime was to be “intrinsically linked” to the performance of tasks required under the contract, being an illustration of the overarching principle that holiday pay must be based on “normal remuneration”.
The EAT emphasised in Willetts that pay would only be considered normal if it were paid regularly or repeatedly over a sufficient time. It did not say what a sufficient time would be and left this to the judgment of tribunals to determine on the facts of each case. However, it agreed with the tribunal in that case that overtime worked one in every four or five weeks was sufficiently regular to count as normal.