Annual leave and holiday entitlement

Fairness and time off are two things which are really important to most employees. Why? Because time is one of the few things that money cannot buy, and holidays can be particularly emotive.

One thing which is predictable for an employment lawyer is regular queries regarding the calculation of annual leave when it comes to part-time employees and bank holidays. It is important to get this calculation correct, and to ensure that all staff are being treated equally.

It is set out in law that employers cannot treat a part-time employee less favourably than full-time and, therefore, the former needs to be allowed the equivalent entitlement to annual leave, calculated on a pro rata basis in accordance with the hours they work. So far, so good – all employees grasp this concept pretty easily, and it is simple to work out where a part-time employee works five days a week but shorter days, for example.

What happens when bank holidays are involved?

Where the situation can become more complicated is when a part-time employee works a set number of days per week – some of which fall on bank holidays – and some that do not. It is easy to see how, without a transparent method of calculation, that bank holidays can be a tricky area.

All employees are entitled to a minimum of 5.6 weeks’ (28 days FTE) paid annual leave, which can include bank holidays.

The easiest way to deal with the bank holiday for a part-time employee is to pro rata the entire holiday entitlement including any bank holiday allowance by way of either days, or hours (essential if an employee works various hours on different days) and then to deduct holiday taken for any bank holidays which fall on days worked.

An example:

An employee works three days a week – Monday, Tuesday and Wednesday. The company gives full-time employees 5.6 weeks' holiday entitlement, including bank holidays. The organisation observes the bank holidays and employees are paid for the time off.

The employee has a pro rata holiday entitlement of 5.6 weeks x 3 days worked a week = 16.8 days including bank holidays.

Where the bank holiday falls on a Monday – a normal working day for the part-time employee – the entitlement is reduced by one day and the staff member receives their pay as normal.

Where the bank holiday – Good Friday, for example – falls on a non-working day, there is no deduction to make and the employee does not receive any pay for the day.

 


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Author: Arwen Makin

After studying law at Cambridge University, Arwen trained at leading national law firm Mills & Reeve, qualifying into their employment team in 2002. Arwen has extensive employment law experience, having advised both employers and employees on a wide range of employment issues. Prior to joining ESP she previously worked for a number of years providing advice and representation to both trade unions and their members, and has a particular expertise in the education sector. Due to her diverse experience she is ideally placed to give advice in relation to professional conduct and regulatory matters.