Bank Holidays Annual Leave

Easter bank holidays could put employers at risk…

Some employers may have to give extra annual leave to their employees, due to how the Easter bank holidays fall this year and how they fall in 2017.

Employers that may be affected will be those who operate an annual leave year that runs from 1 April to 31 March, dependant on how their employees’ contracts are worded. If the wording used is along the lines of “20 days’ holiday plus bank holidays”, this could land employers with liability to pay additional holiday pay due to the Easter bank holiday dates last year, this year and next year.

In 2015, the Easter bank holidays were on 3 and 6 April, however this year, the bank holidays are earlier, on 25 and 28 March. This means that two Easter breaks fall within the holiday year running from 1 April to 31 March. As such, affected employees will benefit from two additional bank holidays, on top of the usual eight per leave year. A failure to honour a contractual clause providing for “20 days’ holiday plus bank holidays” would be a breach of contract, regardless of the fact that there were more bank holidays than anticipated.

However, whilst employees will gain two bank holidays in the 2015/2016 leave year, they will lose two in the 2016/2017 leave year. In 2017, Easter is later with the bank holidays falling on 14 and 17 April. There will therefore be no Easter break during the whole of the annual leave year, meaning that contractually, employees would only be entitled to 26 days’ leave in 2017.

However, employees are entitled to a minimum of 5.6 weeks’ annual leave, which amounts to 28 days per year (inclusive of bank holidays) for full time employees. This is a statutory minimum and employers cannot negotiate out of it, nor rely on the fact that in the previous leave year, employees benefited from two additional bank holidays.

Employers in this position would need to top up an employee’s holiday entitlement for the year 2016/2017 to ensure that they receive the statutory minimum.

Under these circumstances, employers are left with the option of either bearing the cost of an extra two days paid holiday for the 2015/2016 leave year, or negotiating with their employees to agree a variation to the terms of their contract.

One way around falling into this trap would be to use wording along the lines of “20 days’ holiday plus the usual eight bank holidays only” or “28 days’ holiday including bank holidays”. Of course, employers would need their employees’ agreement before making such a change to their contracts.

 

 

 

To read more visit www.myerson.co.uk

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28Feb2016