Bank holidays

What are bank holidays?

Bank holidays are days when banks in the UK may close for business. Although they are widely observed throughout non-financial sectors in many parts of the UK, employees are not automatically entitled to a day off or extra pay on a bank holiday. Any such right depends on individual contracts of employment.

Can bank holidays be included in a worker’s statutory leave entitlement?

Yes. The Working Time Regulations 1998 permit the inclusion of bank holidays in a worker’s statutory entitlement to four weeks’ paid annual holiday, although this does not mean that an employer can unilaterally override any express or implied contractual terms to the contrary. The government has, however, indicated that it proposes to extend the right to four weeks’ paid annual holiday ‘by making it additional to bank holiday entitlement’. However, it is unclear whether it intends to introduce a right to paid bank holidays, or simply to remove employers’ ability to include bank holidays within workers’ statutory minimum holiday entitlement.

Are part-time workers entitled to bank holidays?

Under the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000, a part-time worker has the right not to be treated less favourably than a comparable full-timer. This includes entitlement to bank holidays.

Where an employer includes bank holidays in the statutory minimum entitlement to holiday under the Working Time Regulations 1998, this is unlikely to cause problems.

However, where full-time workers are entitled to bank holidays in addition to their statutory entitlement to holiday, difficulties may arise. It may be fair to allow part-time workers to take a bank holiday where their day of work coincides with a bank holiday. This is likely to be acceptable where a shift system means that both full-timers and part-timers are equally likely to be rostered to work on a bank holiday. However, where workers work fixed days each week, part-timers could be disadvantaged by such a practice.

As most bank holidays fall on either a Monday or a Friday, those part-timers who never work on these days will be entitled to proportionately fewer days off than full-timers who regularly work on these days.

In these circumstances, the disadvantage could be removed by giving all part-timers pro-rata entitlement to time off in lieu of bank holidays, according to the number of hours they work.

Are employers required to provide pay or time off in lieu of bank holidays that coincide with maternity leave?

During ordinary maternity leave, employees are entitled to the benefit of all terms and conditions of their employment, except remuneration. This includes all statutory and contractual holiday leave entitlement, which will continue to accrue during this period. During additional maternity leave, entitlement to the four weeks’ statutory paid annual leave continues to accrue, but an employer is free to put terms in place regarding the accrual of contractual leave over and above the statutory minimum.

Following Merino Gmez v Continental Industrias del Caucho SA [2004] IRLR 407 ECJ, in which the European Court of Justice ruled that an employer cannot insist that a woman take her statutory annual leave at the same time as her maternity leave, it seems likely that where bank holidays are included in the four-week statutory minimum of holiday entitlement, an employee will have to be permitted to take holiday in lieu of any bank holidays that fall within their maternity leave.

As the Working Time Regulations 1998 state that there can be pay in lieu of statutory leave only on termination of employment, where bank holidays are included in the four-week statutory minimum of holiday entitlement, staff must be permitted to take the accrued holiday as paid time off.

Employers have the option to pay in lieu of any accrued holiday over and above the statutory minimum, or to permit employees to take paid time off.

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