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Banking on a holiday?
Some employees will gain additional annual leave as a result of the way that Easter bank holidays fall this year, next year and in 2017.

The wording in some employees’ contracts could land their employers with an unanticipated liability for paying additional holiday, as a result of variations in Easter dates.

This issue will only affect employers that operate an annual leave year that runs from 1 April to 31 March, and that set out their employees’ paid annual leave entitlement using wording along the lines of “20 days’ holiday plus bank holidays”. [Those employers whose contract wording is along the lines of, “28 days including bank holidays,” should not have a problem.]

Under working time rules, employees are entitled to a minimum of 5.6 weeks which equates to 28 days for employees working five days per week. The 28 days can include bank holidays, of which there are usually eight per year.

The way in which the 2015 Easter break fell meant that, in England, Wales and Northern Ireland, there were bank holidays on 3 and 6 April. In 2016, the bank holidays are earlier: Good Friday is on 25 March and Easter Monday is on 28 March. However, in 2017, Easter is later, with Good Friday falling on 14 April and Easter Monday on 17 April.

This means that two Easter breaks fall within a holiday year running from 1 April 2015 to 31 March 2016: the Easter break that fell early in April 2015, and the Easter break falling in late March 2016. Affected employees will gain from two additional bank holidays (on top of the usual eight) for the leave year.

Failure to honour a contractual clause providing for “20 days’ holiday plus bank holidays” will result in the employer being in breach of contract, regardless of the fact that there are more than the usual number of bank holidays.

For a holiday year running 1 April 2016 to 31 March 2017, employees would appear to lose out. There is no Easter break during the whole of the annual leave year, meaning that they will be entitled under their contract to just 26 days’ leave. However employers cannot simply even up the extra entitlement from one leave year to the next giving employees less than the statutory minimum in the following leave year, so the employer would have to top up the leave to ensure that the employee still had the 28 days in that leave year.

There are two ways of avoiding this problem occurring:

1. Changing your leave year so that it doesn’t start on 1st April; or
2. Change the wording of the contract so that the leave entitlement includes bank holidays.

Both options require negotiation with the employees to avoid a claim of breach of contract. If you need further advice or help with this please get in touch.
Posted on 19 Nov 2016

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