Holidays – should we use weeks or days, and should banks be included or excluded?

Time and again we discuss holidays with our clients, how to calculate them and how to express them. We’re often challenged on why holiday should be expressed in weeks rather than days (‘5.6 weeks’ instead of ‘28 days’) and why bank holidays should be included in overall entitlement rather than separately (‘5.6 weeks including bank holidays’, rather than ’20 days plus bank holidays.’)

Time and again we discuss holidays with our clients, how to calculate them and how to express them. We’re often challenged on why holiday should be expressed in weeks rather than days (‘5.6 weeks’ instead of ‘28 days’) and why bank holidays should be included in overall entitlement rather than separately (‘5.6 weeks including bank holidays’, rather than ’20 days plus bank holidays.’)

Weeks or days?

Apart from the fact that the legislation itself refers to holiday in weeks, the reason we like to express it in weeks is because of complexities arising with part time employees and for the ease of document management.

Thus the logic:

6 weeks = 30 days. Doesn’t it?

Well in the case of someone working 5 or more days per week ‘yes’, but in the case of someone working 4 days per week, ‘no’.

So if you write 30 days on a contract for a 4 day per week person your contract will be wrong. Even if you include a suffix (“with part time employees receiving the pro-rata of this”) the contract is unhelpful to the part timer who will need to work out what their actual entitlement is, and often they get it wrong.

If you write 6 weeks, the contract will be right = 6 weeks @ 4 DPW = 24 days.

If you’re determined to express holiday in days you will have to customise every contract to the precise number of days, or if someone works short days, you should actually express it in hours.

This is why it is better to write in weeks – it will always be right, and if someone changes from full time to part time or vice verca the contract will still be right. If you express in days, technically you might have to issue an amendment to contract every time someone’s working hours changes.

To write in weeks then, mathematically 1 day = 0.2 weeks, 5 days = 1 week.

Include or exclude bank holidays?

Then we need to deal with whether bank holidays are included in holiday entitlement (e.g. ‘your holiday entitlement is 6 weeks per annum’) or excluded (e.g. ‘your holiday entitlement is 4.4 weeks and you shall also be entitled to take bank holidays as paid holidays when they coincide with your pattern of work.’)

If you choose the latter method you have another potential part time worker problem. If a part timer works Tues – Fri they will not have as many paid bank holiday holidays as a full timer, because they don’t work Mondays when most bank holidays happen (and so most bank holidays don’t coincide with their pattern of work, and so they have less benefit from the bank holidays than would a full timer working Monday – Friday.) This amounts to discrimination based on part time status. There’s another potential and polar opposite problem. A cunning 4 day per week employee may decide to not work Tuesdays, ensuring that they will benefit from all the bank holidays. In doing so they will almost certainly benefit from proportionately more bank holidays than their full time counterparts. Whilst this isn’t necessarily discrimination (there is no law prohibiting discrimination of grounds of full time status!) it is manifestly unfair to their full time colleagues.

If on the other hand you include the bank holiday within overall entitlement (‘6 weeks including bank holidays’) it gets around this problem. The part timer has to take banks when they fall on their working pattern (same as everyone else) but they’re free to spend the rest of their holidays when they like, and their holiday ‘bank’ includes the annual bank holiday entitlement, now pro-rated for the actual number of hours/days the part time worker actually works – 6 weeks for a 4 day worker – 24 days, 6 weeks for a 3 day worker = 18 days, 6 weeks for someone who works just 3 hours per week = 18 paid holiday hours per annum.

And so our advice is always to express holidays in weeks and always include bank holidays in the overall entitlement.

One last note on holidays. The Working Time Directive (WTD – which contains the holiday laws) requires employees to have PAID HOLIDAY not holiday pay. This is because the WTD is a piece of Health and Safety legislation and paid time away from the workplace on holiday is designed for rest and recuperation.

It is not ok to work out someone’s holiday pay entitlement and pay them the money without them taking the actual holiday EVEN if they might take the holiday later and unpaid. The courts will often conclude that this type of arrangement (sometimes called ‘rolled up holiday pay’) disincentives the employee from taking paid holiday, and that is against the spirit (and law) of the WTD and potentially presents a H&S risk in the case of employees who minimise holiday time to maximise pay.

If employees don’t want to take their holiday (it does happen I promise) then the minimum they should be encouraged to take is 4 weeks annual leave – the remainder could be paid in lieu. Why 4 weeks? Because this is the minimum under the European Working Time Regulations (WTR) from which the WTD is derived. In the UK we have chosen a national minimum holiday entitlement that is higher than the European minimum, but because what we’re looking at now is the H&S implications of the WTR we can use the lower European standard of 4 weeks, meaning that we have a general duty to ensure workers take at least 4 weeks paid holiday per annum and if they don’t want to exercise their right to take the rest, they don’t have to (although of course they are entitled to.)

What will Brexit mean for this? Goodness knows, but probably not a lot!

If you’re thinking of outsourcing your HR why not contact myhrdept.co.uk. Call us on 01628 820515 to discuss your requirements email us and we’ll call you back.

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