Alan McCormack | Senior Associate

Holiday Pay

All employees are entitled to at least 5.6 weeks of paid holidays per year of their employment under the Working Time Regulations 1998.  This means that all full time employees are entitled to take 5.6 weeks away from work as holidays per year and be paid as if they were at work.  In practice, this amounts to 28 days away from work for a full time employee.

Part time workers are entitled to at least 5.6 weeks paid holidays in proportion to the amount of time that they work.  If you are looking to see what a part time worker’s holiday entitlement should be, an easy to use calculator can be found here.

If an employee begins their employment part way through a year, then they will accrue holidays in proportion to when their employment began to the end of the holiday year (this is not always calendar year).  There is no requirement for an employee to have a certain length of service with their employer in order to be eligible for statutory holidays.  Your employer can choose to provide you with more than 5.6 weeks’ paid holiday per year; however they are not obliged to by law.

Determining, what employees with “normal working hours” should be paid for any time that they take as statutory holiday is straightforward.  This would usually amount to what they would have earned if they were at work for that particular amount of time.  For employees that do not have “normal working hours” or employees whose pay varies according to the amount of work completed, then their holiday pay, is calculated according to a 12 week reference period (this is due to be extended to a 52 week reference period as of April 2020) to try and make sure they do not lose out.  Generally, this would also include any overtime or commission provided that it is ordinarily due to them.

If an employee has not been paid the correct amount of holiday pay, this can be reported to HMRC, whom are responsible for ensuring that all employers pay the correct amount of holiday pay.  An employee who has not been paid the correct amount of holiday pay can also raise an application to the Employment Tribunal for an unlawful deduction from wages claim for the amount that is due to them.  In such cases, if the Employment Tribunal finds in the employee’s favour, they will usually order that the employer pay the outstanding amount to the employee.  An employee can also apply to the Employment Tribunal on the basis that their employer is preventing them from exercising their right to statutory holiday pay or leave.  In such cases, if the Employment Tribunal finds in the employee’s favour, they could make an award of compensation to the employee in the amount that they find “just and equitable” in all the circumstances.

An employee will need to have submitted a claim firstly to the ACAS Early Conciliation process, within three months minus one day from the date the deduction from their wages took place (or, if a series of deductions, the last date in the series) or the date that their employer prevented them from exercising their right to statutory holiday pay or leave in order to comply with strict time limit rules.  If a resolution to the matter is not reached during Early Conciliation, an individual should then proceed with a claim to the Employment Tribunal.  A person claiming will then usually have at least one month from then to claim in the Employment Tribunal after ACAS Early Conciliation had ended but in some cases can be longer.  A person looking to claim should assume that they have one month from the date that the ACAS Early Conciliation period has ended so that they do not exceed the time limit.

If you are an employee or an employer with a query regarding holiday pay, please get in touch with a member of our specialist employment team.

Alan McCormack

Alan McCormack

Employment Law Team

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