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Holiday pay

Holiday Pay - Under the Working Time Regulations, a worker is entitled to 4 weeks holiday per year. 4 weeks holiday is pro-rata for part time workers. This means for example, if a full time worker works 5 days a week, takes 4 weeks holiday, he would be entitled to 20 days off. However, if a part time worker only works 3 days per week and takes 4 weeks holiday, that would equate to 12 days off.

Under the Working Time Regulations, the holidays can be inclusive of bank holidays which are 8 per year. Therefore effectively, the employer would be entitled to days off on bank holidays which is Christmas day etc and a further 12 days off he was full time or indeed she was.

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Who is entitled to holiday pay?

In order to be entitled to holiday pay, one must be a worker or an employee. One must not effectively be then self-employed or genuinely self-employed. There have been a lot of cases recently with regard to who is a worker and who is a sub-contractor. A lot of sub-contractors who are under a Contract for services, offer their labour to businesses over a period of time and because they are not in business for themselves, they fit the definition of worker under the Working Time Regulations. These workers have not received holiday pay and they have been making substantial claims for holiday pay within the construction industry.

What is a holiday year?

Difficulties can occur in the calculation of a holiday year. If there is no set holiday year within the Contract of Employment i.e. from January to December which is very common or the financial year from April to March of the following year which again is fairly common, again it would be imposed on the basis of the imposition of the Working Time Regulations which was the 1st October 1998 so it would run from October to the following October of each year.

If the employee leaves the employment not having taken all his leave during that period, the calculation becomes more difficult in the assessment of what he is entitled to. He is entitled to paid leave on a pro-rata basis on the calculation of 1.66 per calendar month if it is 20 days per year. All figures need to be rounded up in order to make the assessment. It is important to know also that the Working Time Regulations only apply to the minimum holidays and they do not apply to any greater number of holidays that are given which are still subject to contractual terms by the employer. For example, if an employer gives 20 days holiday per year plus bank holidays, he is in fact giving an extra 8 days holiday per year and those extra days are not subject to the Working Time Regulations and are subject instead to the terms that he imposes within the Contract of Employment.

In some circumstances, particularly when you are dealing with workers, there has been arrangements that the employee or worker, can through agreement, take holiday pay as part of an hourly rate provided it is with a written agreement between the parties. This is becoming again more common within the building industry and other sub-contracting basis.

Another interesting example of what used to happen in relation to dismissal for gross misconduct was that when holidays were purely contractual, many employers would have a clause in their Contract saying that if anyone was dismissed for gross misconduct, they would lose any accrued holidays. Under the Working Time Regulations, employers can no longer do this and even if someone is dismissed for dishonesty for example, they would still have to pay for any accrued holiday up to an including these amounts for Working Time Regulations Holidays obviously any additional holidays can still have a separate clause within the Contract of Employment to exclude them for it.

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If you are being put on Garden Leave then please see our Garden Leave pages


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