Holiday entitlement increased on 1st October, and is set to carry on increasing gradually for the next few years until employees are entitled to 28 days off a year.

The Working Time Amendment Regulations 2007 came into force in at the beginning of October. It increases the statutory minimum annual holiday entitlement from 4 weeks to 5.6 weeks over the next year and a half.

• As from 1st October, holiday entitlement has increased to 4.8 weeks (24 days if you work a five day week).
• From April 1st 2009 it increases again to 5.6 weeks (28 days if you work a five day week).

The amendments are designed to give employees paid time off for the eight public holidays in addition to the existing four-week entitlement under the Working Time Regulations. However, in practice there is no obligation to permit employees to take the extra days' leave on public holidays - they can be taken at other times. Employers could still require employees to work on public and statutory bank holidays subject to complying with existing terms and conditions of employment.

As previously, employees are only entitled to a payment in lieu of accrued unused holiday entitlement on termination of employment. Transitional provisions will enable an employer to make a payment in lieu of the additional 0.8 weeks between 1st October 2007 and 1st April 2009.

Employers that already provide for 5.6 weeks' holiday (in other words those employers who provide the full 20 days' annual leave entitlement under the Working Time Regulations plus paid time off on all eight statutory and public bank holidays) will not be obliged to make an additional increase to their employees' holiday entitlement provided that the first 1.6 week's holiday:

• is in addition to the existing rights under the Working Time Regulations
• can only be replaced with a payment in lieu on termination
• can only be carried forward into the immediately following leave year
• is paid at a week's pay for each week of holiday calculated in accordance with the Employment Rights Act 1996, as amended by the Amendment Regulations

This means that employees who are already entitled to 28 days' leave are not able to claim any additional entitlement by virtue of the increases. Equally, employees who would on the face of it be entitled to more than 28 days by simply applying the formula alone, would still only be able to claim the 28 days. Therefore, although 5.6 weeks would equate to 33.6 days leave for someone working a six-day week, the statutory entitlement that employee could claim would be 28 days.

Employers will of course still be free to grant their employees more than 28 days under their contracts of employment should they wish to do so.

Employers will be free to decide how to treat the part days that will result from the calculations - so long as they do not round them down. For example, someone who works a 2-day week is now entitled to 9.6 days holiday. Where an employer rounds the holiday up to the nearest full day, they will be able to:

• allow staff to take a full day's leave but only pay them for the part day that is owed
• allow the worker to come into work late or leave early so as to use up the part day
• or allow the part day to be carried over to the next holiday year

The increases in holiday entitlement will be calculated proportionately depending on when the employee's holiday leave year commences.

Whether or not this additional leave is taken on a bank holiday is up to individual employers to agree with their employees.
The following table* enables the increased holiday entitlement for existing employees to be calculated. The statutory entitlement for an employee will depend on when their leave year begins. To work out the entitlement read across the table from the start date of the leave year. For example:

A member of staff whose leave year begins on 1st April will have a holiday entitlement of:
    4.4 weeks in the leave year April 2007-March 2008;
    4.8 weeks in the leave year April 2008-March 2009;
    5.6 weeks in the leave year April 2009-March 2010 and onwards.

The Business Link website at www.businesslink.gov.uk provides an interactive tool that helps calculate holiday entitlement.

To discuss this or any other employment matter, please contact Chris Wiper at chris.wiper@close-thornton.co.uk or call him on 01325 466461

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