Only in the competitive world of business, there are still jobs to be done, clients to keep happy. Production can’t stop just because the sun is shining. 

For businesses in the print sector, deadlines loom continually and must be met. But at certain peak times of year, like now and during the Christmas period, employers often come under pressure from employees eager to take their annual holiday entitlement at the same time. Waving this through might leave a business short-staffed, compromising its effectiveness, with potentially damaging repercussions.

So where do employers and employees stand? And what constitutes best practice with regard to annual leave?

For a start, under the Working Time Regulations 1998, full-time workers are entitled to a minimum of 28 days of paid leave – though it should be noted that this includes public holidays. 

These regulations came about as a result of the European Working Time Directive, which requires all EC countries to ensure all workers get at least 20 days of paid holiday each year.

“So far, so uncontroversial,” says BPIF head of legal and HR Anne Copley. “But a great deal of case law has built up around issues such as whether those on long-term sick leave should get holiday pay. Answer: yes, if they were ‘unable or unwilling’ to take holiday – whatever that means!”

By the book

Evidently, there are certain aspects of employment law that remain open to interpretation; even where the experts are concerned. With this in mind, employers should make sure they are aware of their legal obligations, stick to contracts of employment scrupulously and note down the particulars of any relevant conversations on this issue with employees.

Precisely how holiday pay should be calculated is also open to debate sometimes. For instance, should commission payments be taken into account, or just basic pay? In fact, commission payments should usually be taken into account. 

This being the case, it obviously raises the question as to what the reference period for making a calculation should be. It may well be that the most logical and representative reference period from which to arrive at a fair figure is a full year.

Then there is the matter of whether holiday pay should reflect regular overtime payments. Last year, in the case of Neal vs Freightliner, an employment tribunal ruled that an employee had been underpaid because the hours he worked over and above his contractual hours were “intrinsically linked” to performing his role and that paid overtime, whether voluntary or not, should now be considered alongside other premiums in employers’ holiday pay calculations.

However, that decision has subsequently been challenged and the case rumbles on. At the time of writing, Neal vs Freightliner is due to be heard by the Employment Appeal Tribunal on 30 July 2014. The outcome will provide some much needed clarity on this issue, so keep your eyes peeled for the judgment.

Where workers have been underpaid, there’s also the consideration of how far back into the past they can go when seeking redress. According to Copley, in the case of sickness, that probably extends no further than 15-18 months. For other scenarios, it may be as long as several years.

“Employers are often confused by the fact that different rules apply to different parts of an individual’s holiday entitlement,” Copley concedes. Although the Working Time Regulations specify 28 days of paid leave, it is actually the European Directive that holds sway when arriving at a figure for entitlement during sick leave. “So with sick leave, it is now established that only the 20 days in the Directive can be claimed,” explains Copley. 

Away from the minutiae of legal wrangling, Kall Kwik managing director Nigel Toplis is of the opinion that when it comes to staff holidays, you have to look at the bigger picture. “Yes, it might be costly, inconvenient and disruptive when a team member disappears for a week or two,” he says. “But if you allow yourself to resent holidays, you will most likely offer the minimum entitlement. And that is not a recipe for a productive workplace.” 

The best-run and most profitable businesses tend to be those with hard-working, professional staff who have an affinity with their employer. These employees need and deserve their time off, Toplis maintains, and employers should try to foster a workplace culture in which holidays are something to be looked forward to. It’s counterproductive, not to mention unfair, to make staff feel embarrassed about making holiday requests, he feels.

“Holidays are a good thing because they keep good staff happy, motivated and energised,” adds Toplis. “As the boss, it is your role to plan business structure and processes allowing for the fact that people will not be there at certain times. Involving staff in the planning process can be very advantageous. You may be surprised to find that they make their own suggestions such as avoiding key people being away at the same time, for cover to be automatically provided and for peak production times to be ‘holiday free’.”

In certain instances, it may be that ‘cover’ will have to come in the shape of temporary staff. Whenever this is the case, it’s crucial to bear in mind that temps have many of the same employment rights as permanent staff. It’s also important to put in place performance management criteria for temps to ensure they are motivated and delivering the required level of service.

Work-life effectiveness

Of course, it’s even more key that permanent staff feel engaged and have a sense of wellbeing. Much has been made in recent years of the need for work-life balance. Interestingly, as the debate has progressed a new term is beginning to gain traction in business circles: work-life effectiveness. 

Whereas work-life balance implies that people devote equal time to both, work-life effectiveness is intended to convey the psychologically healthier notion of work fitting comfortably with other aspects of your life in a way that’s fulfilling. After all, no one wants to feel like a wage-slave drudge existing only for time off. 

BAPC chairman Sidney Bobb says that the biggest problems around holidays tend to centre on a lack of communication between employer and employee. “If the employer has clear rules setting things out in a simple way, even if some of the staff may not like what they say, the important thing is that people know where they stand. The problem with holidays, is that it’s an emotive subject because everyone is influenced by outside parties. Staff are influenced by loved ones who want to go on holiday at a particular time and by school holidays.”

One occasional bone of contention is whether holiday entitlement can be carried over. For employees whose contracts allow them more leave than the statutory minimum of paid leave, it is up to the employer to decide whether any untaken days can be carried into the next leave year. Clearly, those firms with a strong culture of communication, flexibility and mutual respect will be better placed to deal with problems such as this to everyone’s satisfaction.

“Holidays are a bloody nightmare,” jokes Webmart chief executive Simon Biltcliffe. “There is never a good time to take them – or for one of your team to take them – but they are vital to keep body, soul and family together. So we insist people take their holiday in the year of entitlement, unless there are extenuating circumstances or common sense reasons why not, or not be allowed into work. Also, giving people time off on their birthday, in addition to their contracted hols, is a welcome touch.”

If you treat people fairly and give fair consideration to people who have young children during school holidays, he adds, most people will ensure their work is covered off their own bat. He says that it’s rare for there to be any conflict unless a holiday coincides with an unexpected event or illness... and then it’s all hands to the pump.

Precision Printing managing director Gary Peeling is scathing about current attitudes to leave. He takes the view that all public holidays apart from Christmas Day and New Year’s Day should be abolished, with the number of days left by law transferred to personal allowances. 

“My issue is not the time, or even the production time lost, but more the effect they have on activity and GDP,” says Peeling. “On a national level, we collectively tag on personal holidays to those days – making almost every organisation and company dysfunctional – and try and do leisure together. Roads are jammed, attractions packed, prices ramped up. It’s a miserable waste of time and money. The days are not spaced and our Christmas break has been an international joke for years.”

It’s certainly an interesting idea. Maybe one to ponder during any time you might have off this summer! 

Annual leave: Keep things fair and transparent

Entitlement

Under the Working Time Regulations 1998, almost all workers are legally entitled to 5.6 weeks of paid holiday per year (known as statutory leave entitlement or annual leave). 

Most workers who work a five-day week must receive 28 days paid annual leave per year. This is calculated by multiplying a normal working week (five days) by the annual entitlement of 5.6 weeks.

Part-time workers are also entitled to at least 5.6 weeks of paid holiday each year, although this may amount to fewer actual days of paid holiday than a full-time worker would get. For example, if a worker works three days a week, their leave is calculated by multiplying three by 5.6, which comes to 16.8 days of annual paid leave.

Statutory paid holiday entitlement is capped at 28 days. So staff working six days a week for example are only entitled to 28 days of paid holiday and not 33.6 days (5.6 multiplied by six).

Bank or public holidays do not have to be given as paid leave. An employer can choose to include bank holidays as part of a worker’s statutory annual leave.

An employer can choose to offer more leave than the legal minimum. They don’t have to apply all the rules that apply to statutory leave to the extra leave. For example, a worker might need to be employed for a certain amount of time before they become entitled to more leave.

All workers who qualify as employees (i.e. have a contract of employment), are entitled to a written statement of their terms and conditions, which must contain information on the employee’s right to holidays, including public holidays and holiday pay. If the employer does not provide a written statement within two months of the date on which the employee started work, they will be breaking the law.

Holiday pay

Workers are entitled to a week’s pay for each week of leave they take. A week’s pay is worked out according to the kind of hours someone works and how they are paid for the hours. This includes full-time, part-time and casual workers.

A shift worker’s holiday pay for a week equals the average number of weekly fixed hours they’ve worked in the previous 12 weeks at their average hourly rate.

For a shift worker with no fixed hours, a week’s holiday pay is the average pay a worker got over the previous 12 weeks in which they were paid.

Some contracts may say that a worker’s hourly rate of pay includes an amount for holiday pay, and that they expect workers to save this part of the pay to cover holidays. This is known as ‘rolled-up’ holiday pay and may be against the law unless the holiday pay is paid on top of the worker’s basic pay and it’s clear what the amount of rolled-up pay is. 

Booking time off

The general notice period for taking leave is at least twice as long as the amount of leave a worker wants to take. For example, an employee ought to give at least two days’ notice for one day of leave, unless their terms of employment state otherwise.

An employer can refuse a leave request but they must give as much notice as the amount of leave requested, i.e. two weeks’ notice if the leave period requested was two weeks.

Although employers can refuse to give leave at a certain time, they can’t refuse to let workers take any leave at all.

Employers can tell their staff to take leave, for example, on bank holidays or over Christmas, and restrict when leave can be taken, such as during certain busy periods. There may be rules about this in the employment contract or it may be what normally happens in the workplace. 

An employer must usually tell their staff the dates of their statutory leave year as soon as they start working. For example, it might run from 1 January to 31 December or inline with the business’s financial year. Workers must take their statutory leave during this time.

If a leave year isn’t set out in a contract then it will start on the first day of a new job (if started after 1 October 1998) or on 1 October (if started on or before 1 October 1998).

An employer can use an accrual system to apportion a worker’s leave during the first year of their employment. Under this system, a worker gets a 12th of their leave in each month. So by the third month they’d be entitled to a quarter of their total leave, for example seven days out of 28 for a five-day week.

Carrying over leave

If a worker gets 28 days of leave, they can carry over up to a maximum of eight days. 

If a worker gets more than 28 days of leave, their employer may allow them to carry over any additional untaken leave. This will be dictated by the employment contract or company handbook, as will any company-specific restrictions, below the eight days, on how many days can be carried over.

Holiday pay, sick leave, and maternity, paternity and adoption leave

Statutory holiday entitlement is built up (accrued) while an employee is off work sick, no matter how long they’re off and even if they become a long-term sick employee (where an employee is off for longer than four weeks).

Any statutory holiday entitlement that isn’t used because of illness can be carried over into the next leave year. If an employee is ill just before or during their holiday, they can take it as sick leave instead.

If the employer agrees, employees can choose to take paid holiday while on sick leave. If, for example, they don’t qualify for sick pay.

Employees continue to accrue both statutory and any contractual paid holiday during both ordinary and additional maternity, paternity and adoption leave. Statutory paid holiday cannot be taken at the same time as maternity, paternity and adoption leave so taking this before the child is born or rolling this over to the next year may be the best options. Note: maternity, paternity and adoption leave cannot start later than the date of the child’s birth or placement for adoption, so an early birth or placement could shorten the amount of annual leave the employee is able to take.