Paid holidays, rest periods and entitlement to time off

Entitlement to paid leave

The statutory requirement to provide full-time employees with four weeks' paid holiday each year has been extended, from 1 October 2007. Full-time employees are now entitled to at least 4.8 weeks' (24 days') paid leave each year. From 1 April 2009 it will be extended again to 5.6 weeks (equivalent to 28 days).

Full-time employees could therefore be entitled to anything between 4.07 and 4.8 weeks of paid holiday in 2007-8, depending on when your leave year starts, and to anything between 4.8 and 5.2 weeks in the following year. There is a ready-reckoner on the BERR website (the Department of Business, Enterprise and Regulatory Reform - formerly the dti) at www.berr.gov.uk to help you work out entitlements.

You will also need to develop a policy for part-timers, who are entitled to paid holidays on a pro-rata basis, and will also therefore be entitled to leave for parts of days under the new rules.

The options are:

• You can round days up (but not down).
• You can carry the new days forward (but everyone must take at least four weeks in the leave year).
• You can 'buy out' paid holiday with a payment in lieu (but only by agreement, and only until 1 April 2009).
• You can devise a system for late starting or early finishing to get the part-days out of the way.

Those employers who, before 1 October 2007, already gave paid bank holidays as well as four weeks' paid leave are not required to increase workers' entitlements - providing that all employees benefit - unless they choose to do so.

Employees accrue paid leave from the first day of employment, with their rights accruing at one-twelfth of the annual entitlement per month worked, rounded up to the nearest half day.

For example, if a new employee was entitled to four weeks and two days (22 days) of annual leave according to the ready-reckoner, and has been with you for exactly two months, he would be entitled to take off 22 x 2/12, to arrive at 3.66 days off. Round this up to the nearest half day, equals four days.

However, the legal entitlement increases in advance, at the start of each month, so if your employee had been with you for any part of month three, his entitlement will be 22 x 3/12, to arrive at 5.5 days. This is then rounded up to six days.

Casual workers, part-timers and temps

Casual workers, part-timers and temps are entitled to paid leave pro rata. If you give your full-time workers more than the statutory entitlement, then your part-timers are entitled to holiday leave on a pro-rata basis.

Absence from work and holiday pay

The right to paid annual leave continues to accrue, even during periods of absence from work (for example, for illness or maternity leave), so that, on termination, he should be paid in lieu of any holiday not taken. However, an employee on sick leave may not take holiday during that sick leave, and is only entitled to paid annual leave for the first year of absence.

Calculating holiday pay

The Working Time Regulations set out a fairly complicated method for calculating holiday pay sums. Care should be taken in approaching these calculations, and legal advice should be sought.

For workers on normal working hours, getting fixed wages for working fixed hours, you pay the net fixed wage, including any fixed amounts normally paid on a regular basis (for example, bonuses or commission). Overtime is not counted except to the extent you are required to provide it in your contract with the employee, and they are required to work it.

If an employee works normal working hours but pay varies with the amount of work done (eg you pay piece rates), or is partly made up of bonuses or commission based on output, calculate what their average hourly rate was over the past 12 weeks. Ignore any premium element for overtime. Holiday pay is calculated by multiplying the average number of normal weekly working hours by the average hourly rate.

If an employee works shifts, so that hours and pay vary each week but in a set pattern, or there are no normal working hours, holiday pay is calculated from average weekly pay over the previous 12 weeks. Overtime is included.

Leavers

You can claim holiday pay back if an employee leaves during the year, having taken full holiday entitlement, but you cannot deduct the holiday pay overpaid from the final wage payment unless there is a written agreement for the deduction of wages.

So in practice, if the worker is difficult, you may have to decide whether to sue, given the amount of money involved, and the message to other employees.

Pay in lieu of holiday

Most employers make it plain in their terms and conditions of employment that employees are expected to take their holidays within the calendar year (with such entitlement to carry it over to the next year as you think reasonable) but that they do not provide pay in lieu of holiday (except in respect of any holiday entitlement outstanding from the final year of employment).

In respect of health and safety issues, you should consider whether the employee is endangering himself, or perhaps even other employees, by not taking holidays. If so, you will have to insist that holiday be taken, if necessary making it a matter for disciplinary action.

Unpaid leave

Apart from maternity and paternity, you are under no obligation to give anyone unpaid time off.

Holiday requests

You can specify when holidays can be taken (eg a Christmas shutdown), provided that everyone gets at least the statutory entitlement off at some time during the year.

You are entitled to ask for two days' notice, for every day of leave requested. Given, eg last minute holiday bargains now available, it makes sense for you to spell this out in employment contracts. You can then make exceptions if it seems reasonable and convenient to do so.

If you refuse a request for time off, you must do so in writing, at least as many days in advance of the holiday as the length of the holiday requested. So for instance, if you have an employee who asks for two weeks off at an inconvenient time, you have to let him (or her) know this is unacceptable, at least two weeks before the holiday is due to start.

Beware making exceptions or refusing requests on discriminatory grounds - differentiating between employees on basis of sex, race, disability, age, religious or philosophical belief, or sexual orientation.

Special cases

Workers can take paid time off:

• To accompany a colleague to a disciplinary or grievance hearing.
• To accompany a colleague to a hearing to consider a request for flexible working.
• To act as employee representative on a business transfer, or in relation to redundancies.
• For jury service.
• To carry out duties as trustees of an occupational pension scheme.
• For employees aged 16 or 17 who have not achieved a prescribed standard in their education or training, to study or train for a relevant qualification.
• For certain employees aged 18, to complete study or training already begun.
• For Trade Union activities.
• To carry our duties as a safety representative for Health & Safety purposes.

Workers being made redundant can take time off for job-hunting or to train for other employment, and are entitled to a maximum of 2/5ths of a week's pay.

Workers can take unpaid time off to deal with emergencies involving a dependent, or attend a dependent's funeral, and to carry out public duties, eg as a JP, prison visitor, local councillor, etc.

Entitlement to days off and rest periods

Generally

Workers are entitled to at least one day (24 hours) off each week. This can be deferred (but not abandoned) in particular circumstances: for instance, where there is a high level of seasonal work, or where round-the-clock working is required.

The 24-hour break each week can currently (if it suits you as employer) be replaced by two separate 24-hour breaks, or one 48-hour break (two 24 hour periods back-to-back) in each 14-day period.

Workers who work more than six hours per day are entitled to a rest break of not less than 20 minutes, away from their workstation. Employers must make sure that workers can take their rest break. Mobile workers are entitled to 'adequate' rest.

Young workers

Workers between the ages of 15 and 18, and over compulsory school age are entitled to two full days off a week, although this can be reduced to 36 hours if the nature of the job makes it unavoidable. There does not have to be any compensatory rest if this happens.

Workers between the ages of 15 and 18 are entitled to marginally longer rest breaks in the working day - 30 minutes in every period exceeding 4.5 hours.

Shift workers

Workers are entitled to 11 hours of continuous rest every day (12 hours for young workers), which yours will not be getting if, for instance, they start at midday and do not finish until the small hours. Moreover, if they work late on several nights a week, you might be caught by the regulations on night working.

Night workers

Employees who regularly work upwards of three hours a night between 11 pm and 6 am will be classified as night workers. Night workers may not work more than eight hours a night, averaged over 17 weeks (or more than eight hours in any night in hazardous occupations, where no average applies). They must be offered a free health assessment before they start working nights, and further free health assessments regularly thereafter. In many cases, once a year would be appropriate.

The first stage of the health assessment should be a health questionnaire, drawn up with the help of a doctor or nurse who knows what the health effects of night-time working are likely to be. If the answers to the questionnaire raise any doubts about the individual's fitness to work at nights, or suggest that his (or her) health may be suffering because of night-time working, the employer must then offer a free medical examination, and act on the findings if necessary. You have to take particular care with new and expectant mothers, and with 'young workers'. You cannot wait until a worker requests an assessment - you must offer one.

If in doubt, take legal advice.