Holiday Pay

Below is a document prepared for employee members of the IoS. Its content makes sense to both employers and employees and hence has not been changed.

Who has the right to paid holidays

Most workers have the right to four weeks' paid holiday. If you are a part-time worker, a fixed term worker or a worker in your first year of employment, you are entitled to paid holiday in the same way as full-time workers. There is also no maximum age limit for qualifying for paid holidays. There are some groups of workers who are not entitled to paid holidays.
If your contract of employment gives you less paid holiday than the law says you should have, you still have the right to amount of paid holiday the law gives you. So even if your employment contract says you are only entitled to two weeks' paid holiday a year, this does not take away your right to four weeks' paid holiday. You may be entitled to more than four weeks' paid holiday if your contract says so.

Who does not have the right to paid holidays

If you are a member of the armed forces, police, or civil protection services, the law does not automatically give you the right to paid holiday. You will have to rely on your contract of employment for rights to holiday and holiday pay.

How much paid holiday can you take

You are entitled to four weeks’ paid holiday each leave year. However, a week’s holiday means you get as many days off as you work in a normal working week. Because of this, the amount of paid holiday you get is equal to the number of days you work in four weeks. For example, if you work five days a week, you work twenty days in four weeks, so you get twenty days' paid holiday each leave year. If you work two days a week, you work eight days in four weeks so you get eight days’ paid holiday each leave year. Your contract of employment may give you more leave than this.

If your normal working week is expressed in hours, your annual leave may be expressed in hours too. For example, if you work 24 hours a week you will get 96 hours' paid annual leave.

If you work irregular hours, you get as many days off as you work in four average working weeks. To work out your average working week, add up all the hours you have worked over the past twelve weeks (or over the number of weeks you have worked if this is less than twelve), and then divide by twelve (or by the number of weeks you have worked).

What is a leave year

A leave year is a one-year period in which you get your year’s worth of leave. Your employer will usually agree the start and end of the leave year with you. Some leave years start on 1 January and finish on 31 December. Others start on 6 April and finish on 5 April the following year. If you and your employer have not agreed when the leave year should start and finish, the leave year will start on:-

· 1 October (23 November in Northern Ireland), if you started work with your employer on or before 1 October 1998 (23 November 1998 in Northern Ireland). Each leave year after this will start on the following 1 October (23 November in Northern Ireland); or
· the date you started work for your employer, if you started work after 1 October 1998 (23 November 1998 in Northern Ireland). Each leave year after this will start on the anniversary of the date on which you started work.

If you start work partway through your leave year, the amount of leave you get depends on how much of the leave year you have worked. For example, if you start work in April in a company where the leave year starts on 1 October, you have started half-way through the leave year. You will therefore get half the annual paid leave for that year. There are special rules if you are in your first year of employment.

Bank and public holidays

You do not have an automatic right to take bank or public holidays off work, with or without pay. If your employer gives you bank or public holidays off and pays you for them, they will count towards your four weeks' holiday unless your employment contract says that you get bank/public holidays on top of the holiday the law gives you. For example, if you work five days a week and you get eight paid bank holidays off each year, these are taken off the 20 days' holiday the law gives you.

There are special rules for shop-workers in England and Wales who work in large shops (over 280 square feet). If you work in one of these shops, you must be given Christmas Day off, regardless of which day it falls on. However, whether or not you will be paid will depend on your contract of employment.

What your contract must say about holidays

If you are an employee you are entitled to a written statement of your terms and conditions of employment as long as you have worked for your employer for one month. You are an employee if you have a contract of employment. Many employers do not give their employees a written statement of the main terms and conditions of the job even though the law says they have to. If your employer does not give you the written statement within two months of the date on which you started work, they will be breaking the law.

The written statement must contain information on your right to holidays, including public holidays and holiday pay. Your employer must give you enough information to work out your entitlement to holidays and holiday pay, and your right to any holiday pay you may have built up when you leave your job.

How much holiday pay should you get

Your employer will pay your holiday pay at the same rate as your normal week's pay for each week of leave. You may get a higher rate of holiday pay if your contract gives you the right to a higher rate.
A normal week's pay is either:-
· if you work regular hours, your earnings for a normal working week, after tax and national insurance contributions have been deducted; or
· if your working hours vary from week to week, your average hourly rate of pay, after tax and national insurance have been deducted, multiplied by your average weekly working hours over the previous twelve weeks. If you have not yet worked twelve weeks, you should work out your average pay over the period you have worked.

Some employers and employment agencies may say that your hourly rate of pay includes an amount for holiday pay, and that they expect you to save this part of your pay to cover your holidays. This is known as 'rolled up' holiday pay. Rolled up holiday pay is against the law.

Your right to paid holiday from the day you start work

If you are a worker who has the right to paid holiday you have this right from your first day of employment. However, this does not mean you can take four weeks’ paid leave on your first day of work. The law says how your paid holiday builds up in your first year of work.

How does your paid holiday build up in your first year of work, if you started after 25 October 2001 (14 April 2002 in Northern Ireland)

If you started work after 25 October 2001 (14 April 2002 in Northern Ireland), the amount of leave you can take in your first year of work builds up over the year. The amount of leave you can take builds up monthly in advance at the rate of one twelfth of your yearly leave each month. If this does not give you an exact number of days leave, your leave is rounded up to the nearest half day. Your employer will deduct any leave you have already taken from the leave you have built up.

For example, if you work full time and have worked for three months, you will have built up five days' leave. Your annual leave is four weeks x five days = 20 days. Your leave after three months is three twelfths of this, because you have worked for three of the twelve months in the year. Three twelfths of 20 is five, so you have built up five days' annual leave.

How to work out your paid holiday if you started work on or before 25 October 2001 (14 April 2002 in Northern Ireland)

If you started work on or before 25 October 2001 (14 April 2002 in Northern Ireland) you are entitled to four weeks' paid leave for each leave year but there are no legal rules about how your holiday builds up.

Can you choose when to take holiday

You can ask to take your holiday whenever you choose, as long as you give your employer the right notice and take into account certain agreements between you and your employer. However, an employer has the right to refuse your request to take holiday, as long as they give you the right notice and take account of certain agreements between you.

Your employer can order you to take all or any of your holiday at a particular time, as long as they give you the right notice and take into account certain agreements between you.

The law does not put any limit on the amount of holiday you can take at any one time. This means you are not entitled to take two weeks of holiday at once, unless your agreement or employment contract says you can. This means that as long as an employer gives their employee the right notice, they could make you take your holiday as they choose, for example, take every Friday as leave until you have used up all of your holiday.

What notice must be given before you take holiday

If you have not got an agreement with your employer about how much notice you have to give before you can take holiday the following rules apply:-

· Your employer can make you take all or any of your holiday at a particular time, as long as they give you notice. This notice must be at least twice as long as the holiday they want you to take. For example, if your employer wants to have a Christmas shutdown for one week, they have to give you notice of the date the holiday is to start at least two weeks before it starts.

· You must give notice to your employer when you want to take holiday. This notice must be at least twice as long as the holiday you want to take. For example, if you want to take three days’ leave, you must give your employer notice of this at least six days before your holiday is due to start.
Your employer can refuse to let you take holiday. To do this they must give you notice equal to the holiday you want to take. So if you have asked to take two weeks’ holiday and have told your employer four weeks before the date you want your holiday to start, your employer must tell you two weeks before your holiday is due to start that you cannot take the holiday.

Your employer refuses to let you take holiday

If your employer refuses to let you take any holiday, you should usually try to sort it out informally with them first. If this doesn't work, you should follow the special three-step grievance procedure which all employers are required to have by law. This means you must:
1. send your employer a written statement, setting out your grievance, and give them at least 28 days to respond
2. meet with your employer to discuss your grievance
3. appeal against your employer's decision if you are not happy with it.

If you have followed this procedure and are still not happy with the outcome, you can ask an employment tribunal to enforce your right to take holiday. If you make a claim to a tribunal, you must do this within three months of your employer's refusal to let you take holiday, although this time limit may be extended if you have raised a written grievance first.

If you have given your employer the right notice of holiday, you are generally entitled to take it. However, under certain kinds of agreement between you and your employer, they can refuse your request for holiday. They can also refuse your request for holiday if they have given you the proper notice of their refusal. However, if your employer has not given you proper notice of refusal but still refuses to let you go on holiday, you can claim compensation at an employment tribunal. You should raise a written grievance with your employer first (see above).

Untaken holiday

If you cannot use up all of your four weeks' holiday in one leave year, you cannot carry it over to the next leave year. The law does not let your employer pay you for holiday you have lost because you have not been able to take those days off.

If your employment contract gives you holiday on top of the holiday the law gives you, you may be able to carry over some of the holiday your contract gives you to the next leave year if your employment contract lets you. If your employment contract gives you holiday on top of the holiday the law gives you, it may also say you can have pay instead of any of this extra holiday that you have not taken.

Holidays and maternity/paternity and adoption leave

Most women employees have the right to 26 weeks’ ordinary maternity leave. In this 26 week period, all of the terms in your job contract stay in force, apart from terms to do with pay. This means that you will have the right to your holidays in the same way as if you were at work, and that you will have your usual holiday rights.

Seasonal workers

Some workers, for example, seasonal workers, have contracts, which say they only work for part of the year. For example, your contract may run for 42 weeks out of 52, and your employer tells you to take unpaid leave for the remaining ten weeks before you start working for them again. In this situation your holiday rights depend on whether you have a contract of employment or not, and whether it continues during the time you are not working.

Leaving your job

If you have not been able to take all the holiday you have built up before your job ends, you have the right to pay instead of the untaken holiday. Your employer should pay you for all the holiday you have built up. If you have an agreement with your employer, which says how much pay you will get instead of untaken holiday, you may get the amount in this agreement. If your agreement with your employer does not say how much pay you should get, the rules on how much pay you should get for untaken holiday are complicated and you should seek further advice.

If your employer refuses to pay you for untaken holiday

Your employer may refuse to pay you for untaken holiday if you are leaving or have left your job. If you are in this situation you can enforce your right to pay for untaken holiday at an employment tribunal. If you are in this situation you will have to raise a written grievance with your employer first.
If you owe holiday when you leave your job
If you have taken holiday you were not entitled to and you leave your job, your employer can sometimes make a deduction from your final pay for holiday you owe. The law in this area is complicated and you should seek further advice.

Holiday pay if your employer becomes insolvent

If your employer becomes insolvent, you may be able to claim money owed from the National Insurance Fund. You can claim up to six weeks’ holiday pay. This may be for holidays you have taken but have not yet been paid for, or for holiday pay you have built up.