Holiday Time Update
Since going to press, the Government has released its response to the final consultation and hopes that the final regulations will be released by the end of June to give employers three months’ notice of the changes. There have been some significant changes to the proposals since going to press with this newsletter, as follows.
The Government intends to:
- delay introduction of the second increase to annual leave from 4.8 to 5.6 weeks until 1 April 2009. The Government had intended to introduce half of the additional holiday entitlement from October 2007, and the remaining half from October 2008. On further consideration of the cost pressures, in particular for the health and social care sector, the Government has proposed the later date. The initial increase will still come into effect on 1 October 2007, as stated in the article
- enable payment in lieu of the additional holiday entitlement (the additional 0.8 weeks) to continue until 1 April 2009. This is a temporary measure to help employers with transitional arrangements, such as recruiting and training any additional staff to cover the increased holiday entitlement
- provide an incentive for early compliance with the regulations, whereby employers that already meet the full requirements of the regulations as at 1 October 2007 (giving the equivalent of 5.6 weeks’ holiday, without payment in lieu and any carryover for no more than one year) will be taken outside of the regulations, as long as they continue to meet those requirements.
The other main provisions of the draft regulations remain unchanged, namely:
- any time off for bank and public holidays can be included in the additional entitlement (e.g. if employees already get 4 weeks' leave plus time off for bank holidays, holiday entitlement will not increase)
- that the holiday will be calculated on a pro-rata basis for part-time workers (4.8 then 5.6 times their usual working week), regardless of whether or not they usually work on bank holidays
- that the increases from October 2007 and April 2009 will be calculated proportionally depending on when the leave year starts e.g. if an employee’s leave year started in April, he/she works a 5 day week and currently receives 20 days including bank and public holidays, the employee will be entitled to 2 additional days from October 2007 to March 2008
- to cap the maximum statutory holiday entitlement at 28 days, although employers may give more contractual holiday than that
- that some or all of the additional holiday may be carried over to the following leave year with the agreement of both the employer and the employee
- that payment in lieu of the additional holiday will not be permitted from 1 April 2009, except on termination of employment
- that the additional holiday will not be excluded from the calculation of average weekly working hours under the Working Time Regulations
- that there will be no qualifying period for the additional holiday entitlement and that partial days’ holiday need not be rounded up to the nearest full day
