UK: holidays - rolled up pay and bank holidays

Further to our Law-Now on 21 March about the ECJ judgment on rolled up holiday pay, the DTI has acted. But, rather than amend the Working Time Regulations themselves, it has chosen to amend its guidance. That guidance is a little clearer than the ECJ's own judgment. (Please click here to view our Law-Now on 21 March 2006).

The key point of the new DTI guidance is that it tells employers they "should" renegotiate contracts involving rolled up holiday pay as soon as possible, so that payment for leave is made when holiday is taken.

However the guidance provides no practical answer for employers of genuinely casual employees as to how they are to comply. They do not know when casual workers are taking their leave. One practical answer seems to be to treat the employment as ending when each casual engagement finishes, and make the appropriate payment of compensation under the pro rata formula in Regulation 14 3 (b), but that may raise other issues.

The EAT has coincidentally also ruled on the issue of a part-timer's claim to time off in lieu of a pro rata share of bank holidays. The claim was rejected in McMenemy v. Capita Business Services.

The ruling is probably specific to its facts, but we think the principle is right (under the Part-time Workers (Prevention of Less Favourable Treatment) Regulations), that part-timers who do not normally work on days that are occasionally bank holidays are not entitled to pro rata pay or time off in lieu.

It remains to be seen whether the way the new right to pay for bank holidays, as an addition to statutory leave under the Working Time Regulations will affect this, if at all.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

The original publication date for this article was 28/04/2006.