The entitlement to annual leave and pay under the Working Time Regulations 1998 (WTR) has always been somewhat complicated without guidance. Once you add a pandemic and a furlough scheme into the mix it is no surprise that the confusion may rise and leave some a little puzzled by the new rules and regulations. Employers need to ensure they pay their staff correctly for a bank holiday and advice on how to handle this is very much needed when handling public holidays during furlough.
Most of the UK has eight permanent bank holidays per year: New Year’s Day, Good Friday, Easter Monday, May Day, Spring Bank Holiday, Late Summer, Christmas Day and Boxing Day. However, Scotland has omissions and additions and Northern Ireland has two extra public holidays in relation to the bank holidays taken in England and Wales. The government has also announced an additional UK bank holiday in 2022 to mark the Queen’s Platinum Jubilee.
A few key points to note:
1. There is no statutory right for employees to take bank holidays off work and in the absence of a written statement, or written contract of employment, the rights relating to time off for bank holidays will depend either on what has been verbally agreed or on custom and practice.
2. When an employee works on a bank holiday, there is no statutory right to extra pay – for example “time and a half” or double pay. Any right to extra pay depends on the terms of the employee’s contract of employment. Good employers are likely to offer overtime pay or enhanced time off in lieu, but this will be dependant on an existing work contract.
3. If they have employees currently on furlough, employers need to be careful around bank holidays. There is no statutory right to time off for bank holidays. Employers can include bank holidays as part of a workers’ statutory holiday entitlement if they choose, but do not have to do so.
Where a bank holiday falls inside a worker’s period of furlough and the worker would have usually worked the bank holiday, their furlough will be unaffected by the bank holiday. However, if the worker would usually have had the bank holiday as annual leave, there are 2 options:-
- The bank holiday is taken as annual leave.
If the employer and the worker agree that the bank holiday can be taken as annual leave while on furlough, the employer must pay the correct holiday pay for the worker. Employers may also require workers to take the bank holiday as annual leave with the correct notice periods.
- The bank holiday is deferred.
If the employer and the worker agree that the bank holiday will not be taken as annual leave at that time, the worker must still receive the day of annual leave that they would have received. This holiday can be deferred till a later date, but the worker should still receive their full holiday entitlement. However, if the furloughed employee is not entitled to bank holidays off in their employment contract, a bank holiday will have no effect on their pay during furlough.
4. An important legislation to remember here is that part-time workers must be treated no less favourably than full-time employees. This includes entitlement to bank holidays. So, however you decide to manage bank holidays, all part-time workers will be entitled to the pro-rata equivalent of full-time workers. This means that irrespective of whether the employee usually works on a Monday or not, they should still receive the same pro-rata allocation of paid holiday days.
5. If an employee is required to work on bank holidays under the terms of their employment contract, the employee cannot refuse to work, even for religious reasons. However, employers should be aware of their obligations under the Equality Act 2010, which protects workers against direct and indirect discrimination because of any religion, religious belief or philosophical belief.
However, indirect discrimination can be justified, and is therefore not unlawful, where employers can show that their decision to refuse the time off is a proportionate means of achieving a legitimate aim. Employers should therefore ensure that they have a compelling business reason for refusing any request for leave for religious observance. In particular, the employer should take into account whether or not the organisation could function satisfactorily in the employee’s absence.
6. If employers have worded contracts to say that employees are entitled to “statutory entitlement plus bank holidays”, this no longer denotes 20 days’ leave plus eight bank holidays. Following the increase in statutory minimum leave from four to 5.6 weeks in 2009, this wording grants 28 days’ holiday with eight bank holidays on top. Employment contracts would need to checked in detail to determine if this is an issue.
For further guidance and assistant in handling public holidays through furlough, please contact us here.