Holiday pay: what are your rights as an employer and an employee?

The TUC (Trade Union Congress) has found that 1 in 14 workers aren’t receiving the correct holiday entitlement in their jobs. The TUC has also found that up to one million workers are also not receiving any paid leave at all. Therefore, we at Pride in People have put together a handy guide to holiday pay to outline your rights as an employer and an employee. 

Your holiday rights as an employee

As an employee, workplaces are required to offer workers a minimum of 28 days of annual leave a year, or 5.6 weeks a year, including public holidays, but organisations are also permitted to offer more annual leave if they want to. Details of your company’s policy when it comes to annual leave will be found in your employment handbook. 

Annual leave is paid annual leave. In terms of calculating holiday pay, the Court of Appeal further ruled that voluntary overtime should be included in holiday pay calculations, so if you regularly carry out overtime, you could be entitled to more holiday pay with this given consideration. 

You should also be aware that organisations can refuse to grant holiday requests for a valid reasons, but they must give you an opportunity to take your annual leave at a later date. 

According to the TUC, many employees feel they’re unable to take annual leave, in particular female workers, due to them being burdened with unrealistic workloads which leave them feeling they’re unable to take time off. Also, the sectors which are the worst culprits for workers not receiving their legal holiday entitlement are the female-led sectors education, retail and health and social care. 

If you feel you are actively being discouraged to take annual leave, or feel in a position where you have a heavy workload which means you feel unable to take annual leave, speak to an HR specialist, like Fiona from Pride in People, who will be able to give you an idea of your rights, as well as provide you with advice when it comes to annual leave disputes. 

Your holiday rights as an employer

As an employer, you are legally obliged to provide your staff with 5.6 weeks of annual paid leave a year. You may choose to offer employees more annual leave, and the company rules surrounding annual leave must be outlined in the employee’s handbook. 

For small and medium businesses, staff taking annual leave can sometimes be an issue, in particular if you have a big workload coming in, and not enough staff in work to manage it. Whilst you, as a company, can refuse to grant holiday requests from your staff for valid reasons, you must provide staff with a later date when they can be allowed to take their annual leave. 

Some companies have been accused of providing workers with unrealistic workloads which mean their employees feel unable to, or even discouraged from, taking their annual leave. This can create a culture of presenteeism, and ultimately lead to staff needing time off for stress, and even result in a tribunal. Therefore, it’s always a good idea to consult and HR specialist for advice when it comes to annual leave. 

Workers taking annual leave are required by law to still be paid their wage or salary whilst they’re not in work. However, it’s also worth considering that voluntary overtime should be included in holiday pay calculations, but both voluntary and non-guaranteed overtime are only required to be included in the first four weeks of paid annual leave. 

Furthermore, some businesses which pay their employees commission can find the laws confusing, and it’s therefore recommended that you consult an HR specialist, such as Pride in People, to consult on annual leave. 

What we can do 

Here at Pride in People, we are able to provide consultancy services and advice to both employers and employees about annual leave and their respective rights. We are also able to provide handbooks for employees, as well as draw up employment contracts, which will outline their rights as an employee, and also your rights as an employer.