With another bank holiday under our belts, employers will be thinking about the rest of the financial year.
Whilst most companies operate a January to December holiday year, some employers operate a holiday year that mirrors their financial year, which runs from April to March.
Employers with an April to March holiday year will find themselves in a rather peculiar situation from 2016 through to 2018. Due to the Easter holidays moving, April 2016 to March 2017 will have six bank holidays, rather than the typical eight, whilst the following year will have ten.
Craig Bennison, head of litigation at Empire, a leading Scottish HR and health and safety firm, advises employers to check their holiday entitlement contracts to avoid any confusion or conflict.
He said: “As an employer, you have to ensure your employees receive the correct 28-day holiday entitlement. With only six bank holidays between April 2016 and March 2017, it’s your responsibility to make sure that no one is missing out on holiday days that they are legally entitled to.
“Therefore, check your contractual wording around holiday entitlement. Some contracts may state that employees are entitled to 20 days holiday plus all bank holidays, whilst others may be entitled to 20 days holiday plus eight bank holidays.
“This confusing bank holiday situation is bound to arise again in the future, so it would be worth reviewing your contracts to include wording in the holiday clause that holiday entitlement can be adjusted each year if necessary.”
Craig has provided a list of the three most likely outcomes, alongside appropriate solutions for employers.
Employees entitled to 20 days holiday and all bank holidays will only receive 26 days between April 2016 and March 2017. They will need an additional two days paid holiday. In the following year, they will receive 30 days. It is unlikely you will be able to deduct the extra holiday days, unless the contract states otherwise.
Those entitled to 20 days holiday plus eight bank holidays will need an additional two days paid holiday between April 2016 and March 2017. From April 2017 to March 2018, they will receive 30 days holiday. You can choose not to give employees the extra two days, as there is no automatic right to time off on a bank holiday.
If your employees are entitled to 28 days holiday inclusive of bank holidays, you will need to give them two additional paid holidays between April 2016 and March 2017. The following year they will receive 30 days, so you can choose to give only eight out of the 10 bank holidays.