Bank holidays: Six things’ you need to know

Are employees entitled to extra pay for working on bank holidays? What does an employer do if an employee refuses to work on a bank holiday? How should bank holidays be managed for part-time employees? Bank holidays can raise a myriad of issues for employers – we explain how to deal with some of the most common.

There are normally eight bank holidays a year in England and Wales, nine in Scotland, and 10 in Northern Ireland.

The Working Time Regulations 1998 do not differentiate between bank holidays and other days and do not prevent employers from including them in the 5.6-week minimum annual leave entitlement.

Some employers grant their employees more annual leave than that set by the Working Time Regulations 1998.

1. Queen’s platinum jubilee: bank holiday headache for some employers

The Government has announced an additional bank holiday in 2022 (Friday 3rd June), to celebrate the Queen’s platinum jubilee. In addition, the late May bank holiday has been moved to Thursday 2nd June. This means that employers face the unusual situation of there being two back-to-back bank holidays in June 2022.

Employers need to look at how they will approach the additional bank holiday. This will be determined to some extent by the wording in employees’ contracts of employment. For example, where the contract entitles employees to take leave on “all bank and public holidays”, the employer will be required to grant the extra day as leave.

Even if the employer is not contractually obliged to grant the extra day as leave, it may choose to do so as a goodwill gesture to employees (for example in reward for their hard work during the pandemic).

Employers need to plan well in advance for potential staffing issues. They may need extra staff if their business will be particularly busy on those days, and they may see a spike in requests for annual leave around this time.

2. No automatic right to time off on bank holidays

There is no statutory right for employees to take bank holidays off work. Any right to time off depends on the terms of the employee’s contract of employment.

If an employee does not have the contractual right to time off on bank holidays but refuses to attend work, the employer can treat this as a disciplinary issue. The employer should comply with its own policy for managing disciplinary issues.

If the contract provides that the employee is entitled to take bank holidays as annual leave, the employer cannot insist that the employee works and cannot take any form of disciplinary action. The employer could seek the employee’s written agreement to work on the bank holiday in return for a day in lieu to be taken at some other time, or it could consider increasing the payment for the day as an incentive.

3. No statutory right to extra pay for working on bank holidays

There is no statutory right to extra pay, for example, time and a half or double time, when an employee works on a bank holiday. Any right to extra pay depends on the terms of the employee’s contract of employment.

Employers should stipulate the rate of pay for working on a bank holiday in their written terms and conditions of employment. There is no right for employees to be paid a higher rate than normal for working on a bank holiday unless this is provided for in the contract.

In the absence of anything in writing, written statement, an employee’s rights relating to bank holidays depend either on what has been verbally agreed or on custom and practice. For example, if employees have been paid an enhanced rate for working bank holidays in the past, it may be that this has become a contractual entitlement.

4. Part-time employees need special bank holiday arrangements

Because most bank holidays fall on a Monday or Friday, part-time employees who do not work on these days could be entitled to proportionately fewer days off compared with full-time employees, depending on shift patterns and annual leave arrangements within the organisation.

Employers can head off many potential annual leave issues, including those around bank holidays, by having a clear and concise holiday policy.

Employers must ensure that all employees have at least the statutory minimum annual leave entitlement and that part-time employees are not treated less favourably than full-time employees. To avoid a complaint of less favourable treatment, many employers provide part-time employees with a pro-rated bank holiday entitlement.

While there may be no arrangement that will have entirely fair results for all employees whatever their working pattern, one option is to calculate pro-rated bank holiday entitlement according to the number of hours that the part-time employee works, irrespective of whether they work on the days on which bank holidays fall.

5. Consistency is key for employers when considering holiday requests

If an employee is required to work on bank holidays under the terms of their contract of employment, the employee cannot refuse to work.

However, the employer should refuse holiday requests only where there is a good business reason to do so. If it does not, and treats employees inconsistently, it runs the risk of a discrimination claim, should an employee consider that their holiday request has been refused for reasons connected with a protected characteristic such as age, religion, or race.

Employers can refuse the holiday requested by giving a counter-notice, for example, if the timing would cause serious inconvenience because it is an especially busy time of year or other employees have already been granted holiday. The counter-notice must be at least equivalent to the number of days’ leave that the employee requested. Employers should always fully explain the reason for the refusal to the employee in a considerate way.

6. Look out for “20 days’ holiday, plus bank holidays” in contracts

This style of wording in contracts of employment can mean employees receiving more bank holidays or fewer bank holidays than are required. This is an issue where the employer has a holiday year that runs from April to March and the timing of Easter weekend is such that the employee could receive as many as 10 bank holidays one holiday year or as few as six bank holidays the next year.

The next time this will be an issue for contracts that use such wording will be in 2024, when Good Friday is 29 March and Easter Monday is 1 April. This means that the 2023/24 holiday year would have nine bank holidays and 2024/25 would only have seven.

This issue does not affect employers with an annual leave year running from 1 January to 31 December, as there are sufficient bank holidays in this period. Employers in Scotland and Northern Ireland are unaffected by this issue because of the additional bank holidays in those nations.

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