The bank holiday working time bomb

If you’re one of the thousands of employers whose holiday year runs from 1 April to 31 March and you provide statutory minimum annual leave entitlement made up of 20 days’ holiday plus bank holidays, you’re probably going to have to give your staff an additional two days of annual leave in holiday year 2016/17. What’s the issue?

Under the Working Time Regulations 1998, all workers are entitled to a minimum of 5.6 weeks’ annual leave. This equates to 28 days for full-time workers who work a five-day week, and can include the bank holidays, of which there are normally eight per year in England and Wales. This year, as the Easter break falls early, the two Easter bank holidays are on 25 and 28 March 2016. Last year, the two Easter bank holidays were on 3 and 6 April 2015. So if your holiday year runs from 1 April to 31 March, by the end of the current holiday year (1 April 2015 to 31 March 2016), you’ll have given your workers a total of ten bank holidays, as four of them will have been for the two Easter breaks (April 2015 and March 2016), plus the other six bank holidays. Therefore, if you provide your staff with an annual leave entitlement of 20 days’ holiday plus bank holidays, they will have gained two additional days. You will need to honour this and bear the cost otherwise you risk being in breach of contract.

However, looking forward to next year, the two Easter bank holidays fall on 14 and 17 April 2017, with the result that, in your next holiday year (1 April 2016 to 31 March 2017), there will only be six bank holidays, not the usual eight, because there won’t be any at all for Easter. This means that the opposite situation will apply and your workers will then face a two-day shortfall in their annual leave entitlement as there will only be a total of 26 days (20 days plus six bank holidays). Unfortunately, you can’t rely on having granted extra annual leave entitlement in one holiday year to even out the shortfall in the next holiday year – you still need to provide the statutory minimum in each holiday year. So, you will need to top up your workers’ annual leave entitlement by two days for the next holiday year to ensure that they retain their statutory minimum entitlement. The only way around this is to negotiate with your staff now and agree a change to the terms of their employment contracts for the current holiday year 2015/16 to the effect that they will only receive a total of 28 days – whether that be 20 days plus eight bank holidays only or 18 days only plus ten bank holidays. But, you may well already be too late.

If you provide more than the statutory minimum annual leave entitlement, for example five weeks plus bank holidays, this won’t affect you as you will still be providing more than the statutory minimum in each holiday year, regardless of how the Easter bank holidays fall; it just means staff will receive 35 days in the current holiday year and 31 days in the next. Likewise, it has no impact on employers who use the calendar year as their holiday year.

As Easter falls early this year, you risk there being a two-day shortfall in your workers’ annual leave entitlement for 2016/17 if your holiday year runs from 1 April to 31 March and you provide the statutory minimum of 28 days made up of 20 days plus bank holidays. You will therefore need to bear the cost of topping this up, unless you move quickly to negotiate a deal with your staff for the current holiday year.

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