Increased statutory minimum paid holiday entitlements will benefit millions of workers

Six million workers will benefit directly from the government’s decision to raise statutory minimum paid holiday entitlements from 20 to 28 days.

But research by Personnel Today’s sister publication, Employment Review, reveals that many organisations currently offering more than the legal minimum may also increase their employees’ holiday entitlement to stay competitive.

Although very few organisations in the study currently offer less than 28 days’ paid leave, including bank holidays, one in seven (14%) plan to review what they currently have on offer to employees.

The DTI is planning to increase paid holiday for a full-time worker from 20 to 24 days from 1 October 2007, and again to 28 days from 1 October 2008.

Other changes include allowing some or all of the additional days to be carried over into the next holiday year when both employer and worker agree to do so. But it will remain against the law for employers to pay their workers in lieu of any part of their basic leave entitlement.

The Employment Review study also reveals that a further one in eight employers (13%) plan to review holiday arrangements as a result of age discrimination laws. Other reasons given by employers for considering changes to holiday entitlement include wanting to harmonise terms and conditions, to meet new arrangements under the NHS Agenda for Change agreement, and helping to retain key employees.

Public sector workers get the best deal…

Workers in the public sector are entitled to the most holidays, while those in hotels and catering get the least, the Employment Review survey shows.

Excluding bank and public holidays, which almost all organisations in the survey offered as paid leave, the median entitlement across all groups of employees was 25 days.

Eighty-one of the 261 employee groups in the research offered 25 days’ leave.

Although the study covered 135 organisations with nearly one million employees, the findings are further broken down to show results for employee groups, as many employers offer different holiday entitlement to sections of their workforce.

One explanation for the longer leave found in the public sector is that this includes school and university teachers, two groups that have traditionally enjoyed generous holiday arrangements. Another reason is that the sector is heavily unionised.

The shortest holidays found by the survey were in the hotel and catering sector, where some employees were entitled to just 12 days. The addition of eight paid bank holidays brings their entitlement up to the current legal minimum.

…and loyalty is rewarded

More than half the organisations (56%) in the survey offer additional paid holiday based on length of service.

This was most common in the public sector (80%), among organisations with more than 1,000 employees (65%) and where trade unions were recognised (63%). Most commonly, service-related leave added one day’s holiday for each year of service for the first five years.

Other practices such as adding holiday after 20 or 25 years’ service were also widespread. But the report warns that employers need to review these arrangements to ensure they comply with the age regulations.

Service criteria based on more than five years’ service must now be justified by reference to a business need. This can be done, for example, by encouraging loyalty or rewarding experience.


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