Navigating holiday pay

Ah, the summer holidays. Dreaded by parents and employers alike! I'm only joking, of course. But particularly at the back end of the pandemic, it's a time of year which can cause headaches.

Navigating holiday pay

By now the summer break is in full swing and you’ll probably have had a number of issues to overcome already. But if you’re in any doubts, and want to remember some lessons to put into practice over Christmas, or next summer, hopefully this article will help.

Employees’ legal rights to holiday

The regulations state that statutory holiday – paid leave of 20 days plus Bank Holidays  per year for full time workers has to be taken, or lost.

For workers who are employed only for part of the year but whose contract lasts for a whole year or more, a Supreme Court ruling this July has determined that holiday entitlements can not be pro rata. These staff – typically term-time only workers – are entitled to 5.6 weeks of annual leave, too.

What complicates matters currently is that the Government allowed holiday not taken during the two years of the pandemic to be taken forward. Employers looking to manage their staff in the summer of 2022 might therefore find they are struggling to keep workforces functioning, given how many people want to take a break. This is likely to continue over the Christmas period at the end of this year, too.

So what are the rules for employers? Well, you don’t have to agree to holiday requests if it’s going to cause problems for your business.

In terms of timing and the process the rules,  should be set out in your policy or you can revert to the Working Time Regulations.

To comply with these, firstly, employees need to give twice as much notice as the holiday they want to take, plus one day. The employer then has to respond after the same amount of time as the holiday period requested, plus one day. So for a four day holiday, the employee has to give nine days of notice, with the response from the employer coming in five days.

Justifiable reasons for refusal are based on practicality, convenience and potential negative impact on the business. As ever, be reasonable and you can’t go too far wrong.

Don’t forget to factor in parental leave

Employers often forget to factor in parental leave as it is unpaid. However with the cost and difficulty of child care during the summer holidays its one to watch out for.

So, any employee with a year or more of service has a right to a total of 18 weeks of parental leave until the child’s 18th birthday, taken in whole weeks (unless your have disabled children) for a maximum of four weeks per year unless you offer them more.

This time may be used as family time, to settle into new childcare arrangements, or to look at new schools, for example.

This applies to employees only – not workers, or the self-employed – and is for birth or adopting parents, not foster parents.

So employers should recognise that employees with children may well like to take a week or two off during the summer holidays, to spend time  to look after their kids.

Practical steps for mitigating holiday admin risks

For business owners, the key is planning supported by appropriate, fair and legally compliant policies which don’t leave you short staffed in critical areas.

For example, it’s not good sense to let all your managers go off on holiday at the same time, or all your front of house staff if you’re in a restaurant or hospitality business. That’s pretty obvious, of course, but you’d be surprised how often such mistakes happen.

It’s also worth mentioning the impact on retention that good – or bad – holiday policies can have. You’ll know the importance of keeping your employees on board and the costs that high staff turnover can have. Factors like holiday policy can make a real impact here.

So we would certainly advocate having your policy and processes well in place before these issues become issues.

At The HR Dept, for example, we offer a toolkit which provides businesses with a system to avoid arguments, under a first-come-first-served system, of who put holiday requests in first, and so on.

Such tools can also calculate each employee’s remaining holiday, with a calendar showing all holiday which is booked on a monthly basis.

All of which can make juggling the perils of the holiday season much easier for business owners.

Sue Tumelty
Sue Tumelty