Julie
Quinn, a partner in the employment department of the international legal
practice, Allen & Overy LLP, outlines HR’s holidays from hell. Here are the
top five problems that are likely to dampen the spirits of those with even the
sunniest disposition
1.
Bank holidays
Is
there a right to take bank holidays in addition to the four weeks’ statutory
annual leave under the Working Time Regulations (WTR)?
No.
Employees can be asked to work bank holidays. In addition, bank holidays can be
offset against paid annual leave entitlement.
Do
part-timers and shift workers lose out on bank holidays if they fall on a day
when they are either rostered to work or when they ordinarily wouldn’t be
working?
Loss
of holiday entitlement for shift workers or those on compressed hours could
lead to a breach of mutual trust and confidence.
Short-changing
part-timers could also result in a claim under the Part-time Worker (Prevention
of Less Favourable Treatment) Regulations, unless it can be objectively
justified. There may also be an indirect sex discrimination claim if the
disadvantage impacts on part-timers, who are mainly women.
The
fairest method of calculation in these cases appears to be based on working out
holiday entitlement in terms of hours rather than weeks or days.
2.
Overtime and commission
Are
overtime and commission included in the calculation of holiday pay?
In
Bamsey v Albion Engineering Ltd, the Court of Appeal held that overtime should
not be included in the calculation of ‘normal working hours’ for the purposes
holiday pay, unless the contract requires the employer to provide overtime and
the employee to work it.
A
success-related commission was also not included in holiday pay calculations in
Evans v Malley Organisation because it was not based on the amount of work done
but rather the outcome of the work. The Court of Appeal found that only where
remuneration varies with the amount of work done should commission, bonuses and
other similar payments be included in the calculation of a week’s pay.
3.
Rolled-up holiday pay
Can
employers provide casual workers with a rate of pay that expressly includes an
element of holiday pay (for example, rolled-up holiday pay)?
Rolled-up
holiday pay was endorsed by the Court of Appeal in Clarke v Staddon and
Caulfield v Marshalls Clay Products. However, in MPB Structures Limited v
Munro, the Court of Session held that it did not satisfy the WTR requirements
because the right is not simply to receive pay for annual leave but rather the
right to receive pay in respect of each period of leave taken.
Clarke
is being referred to the European Court of Justice to resolve the conflict, so
watch this space!
4.
Holiday sickness
Do
workers still qualify for statutory annual leave if they are long-term sick?
Yes.
According to the Employment Appeals Tribunal in Kigass Aero Components Ltd v
Brown, a worker can accrue their annual leave and take the holiday while they
are off sick (subject to complying with the statutory notice requirements).
Leave
to appeal to the Court of Appeal on this point has been given in Commissioners
of Inland Revenue v Ainsworth & Others so, once again, watch this space!
5.
Religious holidays
Do
employers have to grant all requests for religious holidays since the
introduction of the Employment Equality (Religion or Belief) Regulations
2003?
No.
However, Acas guidance on the new regulations advises that a “refusal to grant
such leave may be indirectly discriminatory on grounds of religion or belief if
it cannot be justified by a legitimate business need which cannot be met by any
other reasonable means”.
