Holiday entitlement made simple

Confused by the new rules regarding holiday entitlement and what it means to your salon? We've simplified them to help you to implement the changes for your staff:

• October 1 2007 - minimum amount of holiday increased to 24 days a year (from 20)
• April 1 2008 - holiday entitlement will increase to 28 days a year.

Implementing the Changes

• The additional leave entitlement can be replaced with a payment in lieu until 1 April 2009. After that payment in lieu can only be made in cases of a termination of contract.
• Employers can agree with employees that the additional leave entitlement may be carried forward into the next holiday year.
• There is no requirement to increase holiday entitlement where workers were already entitled to at least 28 days' holiday before 1 October 2007.

TIP: If your salon's holiday year does not begin on October 1 you can use the Department for Business Enterprise and Regulatory Reform (DBERR) website's ready reckoner to help calculate an employee's new holiday entitlement.

Setting Out Holiday Rights

Holiday arrangements are usually set out in a contract of employment or statement of terms and conditions of employment. The following details should be included:

• Details of the employer's holiday year
• The amount of holiday entitlement
• The amount of holiday pay.

The Holiday Year

An employer can specify the dates of its holiday year. If no holiday year is stated an employee's leave entitlement is calculated either from the date the employee started working for the employer, or for employees already employed on or before October 1998, from 1 October.

Bank Holidays

The recent statutory changes to holiday entitlement are designed to allow employees to benefit from the eight bank holidays, however there is no entitlement to take holiday on these days. Depending on the nature of the work in question and any holiday rules the employer might have put in place, an employee can be required to work on bank holidays.

Taking Holiday/Accumulating Leave

In the first year of employment, employers can use an accrual system to total up how much leave an employee has built up during their first year Case law has established that accrued holiday should be calculated on the basis of the actual days worked in a year, rather than the calendar year of 365 days. Where fractional days occur there is no requirement for the employer to round up the entitlement to a day.

Carrying Over Leave

• From 1 October 2007, employees can carry over into the next holiday year any holiday entitlement over four weeks (20 days for a five-day week, 16 days for a four-day week etc). However, there is no statutory entitlement for this; it must be agreed between the employer and employee.
• Until 1 April 2009, employers can temporarily pay employees in lieu of the additional days.
• After 1 April 2009, employees cannot be paid in lieu for days not taken or carried over.

Applying For Leave

• Employees must give notice to their employers to take holiday.
• The notice period must be twice as long as the period of leave requested.
• An employer is entitled to refuse permission by giving counter notice at least as long as the leave requested.

Restrictions On Taking Leave

Employers can elect to specify:

• • particular dates as days of closure when employees are expected to take annual leave.
  • Maximum amounts of leave that can be taken on any one occasion, and when the leave may be taken.

Any such restrictions must either be stated in the contract of employment; implied from custom and practice; or incorporated into individual contracts from a collective agreement between the employer and trade unions.

Holiday Pay/Normal Working Hours

If an employee's salary does not vary with the amount of work done, then for each week of statutory leave entitlement, he or she is entitled to a week's pay. If an employee's pay does vary with the amount of work done, then the amount of a week's pay is the pay for the normal weekly working hours multiplied by the employee's average hourly rate over the preceding 12 weeks. If an employee has no normal working hours a week's pay is the average pay received over the preceding 12 weeks.

Part-Time Employees

Part-time employees are entitled to the same holidays as full-timers, but on a pro-rata basis. For instance, an employee who works three days a week is entitled to 14.4 days' holiday a year (their normal working week and the standard 24 days pro-rata).