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Extra day bank holiday dilemma: Allow employees time off or not?

The extra bank holiday to celebrate this year’s Royal Wedding has been greeted with delight by employees

However, it is likely to create an organisational and financial headache for many businesses.

The extra holiday on 29 April 2011 falls in between Easter and May Day. This means many people will work a four day week, followed by a three day week, then another four day week, which will no doubt cause organisational issues and a drop in productivity.

This extra holiday will pile more pressure on businesses which will be forced to foot the bill for the holiday – an unwelcome cost at any time but one made worse coming just months after the VAT increase.

However, the immediate financial cost to employers of losing a working day for William and Kate’s wedding is only half the story. As a further bank holiday for the Queen’s Diamond Jubilee has been scheduled for 2012 and with calls for St George’s Day and St David’s day to become bank holidays in their respective countries, employers may ask themselves the following questions when preparing for additional bank holidays.

Do employees have a legal right to time off on a bank holiday?

Many employers will not realise that employees do not automatically have the right to take time off on bank holidays. The Working Time Regulations 1998 (WTR), which govern holiday entitlement, state that employees are entitled to 5.6 weeks of paid annual leave, the equivalent of 28 days for a full-time employee. As long as employees are allowed at least this amount of holiday entitlement per year, the WTR will be satisfied, regardless of when in the leave year this is taken.

Whether or not an employee is entitled to be off work on a specific bank holiday is a matter to be determined by their employment contract and the way in which holiday entitlement is explained within that contract. Below are just three examples of the way in which an employee’s holiday entitlement can be expressed within the contract of employment:

  1. The employee will be entitled to 28 days annual leave per year.
  2. The employee will be entitled to 20 days annual leave per year in addition to the following bank holidays:
    1. New Years Day
    2. Good Friday
    3. Easter Monday
    4. May Day
    5. Spring Bank Holiday
    6. Summer Bank Holiday
    7. Christmas Day
    8. Boxing Day.
  3. The employee will be entitled to 20 days annual leave per year in addition to public holidays.

In examples 1. and 2. above the employee would not necessarily be entitled to time off for the additional bank holiday in April. They would, of course, be able to request to take this day off but this would be subject to the request being acceptable to the employer. It is only in example 3. that the employee would be able to argue that they had a contractual entitlement not to work on an additional bank holiday. This is because this example specifically stipulates that public holidays (whether they be annual or not) will be part of the annual leave entitlement.

Employers should check each individual contract of employment to ensure that they are clear as to what the position is in relation to each employee.

Should part-time workers get the day off?

Part-time employees have the right not to be treated less favourably than their full-time counterparts. This will include equal treatment (on a pro rata basis) in relation to holiday entitlement and so the above guidance will also be relevant to part-time workers.

In addition, where a bank holiday falls on a day when a part-time employee would not usually be in work, they should be given the opportunity to benefit from this at another time.

Why should employees be given the day off if they are not entitled to it?

Employers considering not allowing the extra day as a holiday should bear in mind the risk of lowering employee morale as most will assume they are entitled to the day off. This is a real dilemma as low morale can have a devastating effect on productivity, particularly in a small business. As all employers will be aware, the effects of low morale last much longer than a day. Therefore many employers might reluctantly accept that it is better to give employees the extra day off and absorb the financial and organisational implications rather than lower morale in the medium to long-term.

What if employee’s call in sick to get the day off?

Those employees who are required to work on the bank holiday may be encouraged to phone in sick to get the day off, especially if they are not entitled to any enhanced remuneration for working that day. This may cause additional problems, at short notice, for employers who may already be operating with less staff.

To help guard against this, employers should ensure that they have a clear, well publicised, absence policy in place and remind employees that any unauthorised absences will be dealt with as a disciplinary matter.

We hope that the above has given some guidance as to how to prepare for the Royal Wedding bank holiday.

To discuss this issue in more detail, contact our Employment & HR team on 01332 226 144.

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