Shainul Kassam, columnist and Principal at Fortune Law discusses how, with the festive season just around the corner, this can be the busiest time of the year for the hospitality business. It is more important than ever that employers in this sector need to understand what their employee's rights are in respect of taking time off and how to balance these rights with the needs of the business.
RELEVANT LAW
The governing legislation is comprised of the Working Time Regulations (NI) 1998 ("WTR"), which implements the Working Time Directive (2003/88/EC).
Under the WTR 1998, an employee can bring a claim if you do not:
- Allow them to take their holiday entitlement
- Pay them for any unused holiday on termination
- Pay them the statutory holiday pay
An employee who is denied statutory entitlement to paid annual leave under the WTR could seek just and equitable compensation.
Where an employer fails to pay holiday pay, in breach of Regulations 14 and 16, this will be remedied by calculation of the monies that are due for the annual leave period.
It is therefore important for employers to understand their obligations regarding holidays to avoid being in breach of the legislation. You should bear in mind the following:
1. How much holiday are staff entitled to?
The right to annual leave under the WTR is currently 5.6 weeks in each leave year, which is equivalent to 28 days for a full time worker. Part time workers should benefit from a pro-rata equivalent. The 8 days each year represents the number of bank holidays in a year, but need not be used for them specifically. There is no legal right to paid leave for public holidays; any right to paid time off for these holidays depends on the terms of a worker's contract. Paid public holidays can be counted as part of the statutory 5.6 weeks of holiday.
Employers can set the times that workers take their leave, for example for a Christmas shut down.
There is no statutory right to paid public holidays as long the total holiday entitlement is not less than the minimum under the WTR; any right to paid time off for these holidays depends on the terms of a worker's contract. This is beneficial to the hospitality sector who would inevitably require at least some staff to work weekends and public holidays, particularly during the Christmas and New Year period.
2. When does the holiday year run from?
The leave year commences on the date set out in the relevant agreement, normally the employment contract. If the leave year is not specified then the leave will begin on 1 October each year (the anniversary of the regulations coming into force) if the employee was already employed on 1 October 1998 or, for workers who started work after 1 October 1998, the leave year begins on the date the employee commenced work and each anniversary of that date. The latter default regulation position would make planning and implementing annual leave more difficult and it is therefore prudent to provide for a common leave year into employments contracts.
3. When may holiday be taken?
statutory leave can only be taken in the leave year in respect of which it is due and therefore there is no right for an employee to carry forward untaken holiday to the next year. You can choose to allow an employee the flexibility to do this but cannot compel them to do so.
However, employees are arguably entitled under European law to carry over holiday if they have been absent owing to statutory maternity leave for example. It is good practice to allow this therefore in respect of leave taken for maternity, paternity and adoption leave. UK and EU law also allows an employee to accrue and take paid statutory annual leave during a period of sick leave.
4. Can I pay staff in lieu of holiday?
If an employee has not taken their annual leave entitlement in full in any holiday year, under the WTR this may not be replaced by payment in lieu, unless the employee's employment is terminated for any reason.
5. How much notice of holiday does an employee have to give?
Under the WTR, an employee can give notice if the wish to take statutory holiday. The notice must be must at least twice the period of leave that they are requesting (regulation 15(4)(a). You can refuse the request by serving a counter-request for example proposing different times and periods of leave. You can also give notice to an employee to take statutory holiday on specified dates. You are however at liberty to vary or exclude any such notice requirements, for instance workers could be required to give longer notice of intention to take holiday or you could make a specific provision for the authorisation of leave by a manager. Any such provisions should be included in the contract or terms of employment with the employee.
6. How much do I have to pay my staff when they are on annual leave?
you must pay workers at a rate of weeks pay for each week of leave, calculated in accordance with sections 221-224 of the Employment Rights Act 1996. The way payment is calculated depends on a number of factors including the kind of hours and how they are paid for the hours. For example, for workers with normal working hours if their pay does not vary with the amount of work done then a week's pay is the amount due for a week's work under the worker's contract. It is difficult to set out every type of working arrangement in this article.
If you need further advice on a workers holiday rights , or have had a claim made against you under the WTR or want to discuss an employment matter in general, please do not hesitate to get in touch by telephone on 020 3102 6372 or by e-mail at enquiries@fortunelaw.com.
About the author
Shainul Kassam set up Fortune Law in 2004 and deals with a wide range of corporate and commercial matters. Particular areas of specialisation include flotations on AIM, mergers and acquisitions, joint ventures and corporate finance transactions. Shainul also works with smaller, growing companies whose legal needs range from implementing terms and conditions of business to collaboration agreements.
