Annual Leave Increase
The current statutory holiday entitlement of 20 days is changing and will increase to 4.8 weeks (24 days for a five day week) from 1 October 2007. Currently, employers who give their staff a paid day off on Bank Holidays can require them to take these days from their four week entitlement.
The legislation allows employers to replace the increase in the statutory holiday entitlement with a payment in lieu for a transitional period, provided that both parties agree. The transitional period runs from 1 October 2007 to 31 March 2009 and is designed to give employers the opportunity to adapt to the increase, for example by recruiting and training additional staff to cover the extra days during which workers are absent. From 1 April 2009, payments in lieu of the extra leave entitlement will only be permitted on termination of employment.
As you are already aware, the Working Time Regulations 1998 do not allow the four weeks' statutory leave to be carried over to another holiday year and there is no right to payment for statutory leave that an employee has failed to take by the end of a leave year. However, while four weeks' statutory leave must still be taken during the year in which the employee is entitled to it, some or all of the additional statutory holiday entitlement can be carried over, provided that both the employee and employer agree to this. Additional statutory holiday entitlement that is carried over must be used in the following holiday year.
From 1 April 2009 the Government plans to increase the annual leave entitlement from 4 weeks to 5.6 weeks so that paid leave for Bank Holidays will be additional to the four weeks. If an employee works a five-day week, their holiday entitlement will increase from 20 to 28 days. If you already give your employees four weeks leave plus time off for Bank Holidays, their leave entitlement will not change. For details of how to calculate a part-time employee's holiday entitelement, please refer to our April newsletter or contact your HRA consultant.
As the increase in the holiday entitlement is a change in terms of employment to the benefit of staff, you do not need to reissue contracts, but you do need to inform staff in writing of the increased holiday entitlement, either through a letter to staff or by a statement on pay slips for example. The statutory entitlement for a member of staff will depend on when their leave year begins. If you need assistance in calculating the holiday entitlement for your staff or if you would like us to provide a standard letter for you to issue to staff informing them of the increase, agreeing to pay them in lieu of the additional days or agreeing to carry the additional entitlement over to the following holiday year, please contact l ynne@hradvantage.co.uk.
