Working Time Regulations Changes

1st April 2009 was the effective date for the remainder of the changes under the Working Time (Amendment) Regulations 2007.

The transition period for implementing statutory holiday changes has now expired. The new statutory minimum holiday entitlement increased to 5.6 working weeks with effect from 1 April 2009. This equates to 28 days for either a 5 or 6 day per week full-time employees. It’s capped at 5.6 working weeks for both. Part-timers must receive a pro-rata entitlement.

However, statutory entitlement for this year only also depends on your holiday year. January – December is 5.4 working weeks (27 days); February is 5.47 (27.35 days) and March is 5.53 (27.65 days). These potentially obscure amounts can be rounded up but they don’t have to be. However, entitlement cannot be rounded down. Leave years from April onwards in 2009 are all at a minimum of 5.6 working weeks.

From the 1st April 2009, it is also no longer lawful to replace statutory leave with a payment in lieu; even if an employee requests or agrees it.

You may previously have asked employees entitled to a fixed day’s leave to work their Bank Holiday for extra pay instead. You can no longer do this where holiday entitlement is at the statutory minimum level. Employees whose principal statement of terms and conditions reflect the fact that Bank Holidays are normal working days are not affected. Equally, if you provide additional contractual leave or service leave exceeding the statutory 5.6 weeks, such extra holidays can still be paid in lieu of taking the holiday. You may need to review your working practices or you could find yourself paying premium rates and having to concede an additional paid day’s holiday in lieu.

Employers can now also allow holidays in excess of 4 working weeks to be carried forward. Carried forward holiday must be taken during the following leave year. Allowing carry-forward can simply result in an even bigger log-jam of outstanding holidays next year and you are under no obligation to agree to do this. You are advised to exercise considerable caution before conceding carry-forward. If you do allow it, stick to a couple of days and ensure you set an early date by which they must be used.

If you have employees on maternity leave, don’t forget entitlement to holidays now continues through both the ordinary and additional periods. However, it can’t be taken during the statutory payment period (the first 39 weeks) without compromising employees’ benefits (with the exception of “Keeping in Touch” days). One option is to agree with the employee to convert the last couple of weeks of their maternity leave to holiday. This way they get paid (where they otherwise would not) and you dispose of another potential holiday log-jam.

And finally...if things weren’t difficult enough; a recent European Court of Justice judgment infers that employees who are on long term sick retain the right to holiday entitlement. The previous UK convention was that an employee off sick at the end of the leave year lost whatever period remained unused.

Following the case of Stringer versus HMRC, it now looks as though this will be overturned. The ECJ judgment will be reviewed by the House of Lords later this year. Watch this space for further detail.