Holiday Pay – All Is Not Lost
Most employers consider that when it comes to holiday entitlement employees must “use it or lose it” and to an extent that is true.
The basic position under UK law is that statutory holiday (the first 5.6 weeks of leave – equating to 28 days including bank holidays for full time workers) must be taken in the year in which it is accrued. An exception to this is where the employee is prevented from taking their holiday, either by the employer’s refusal to allow them to take it, or as a result of leave including maternity leave and long-term sickness absence.
However, in the recent case of Max-Planck-Gesellschaft v Shimizu this exception was extended further. The court decided that where a worker does not exercise the right to take holiday, the holiday is not lost unless the employer ‘diligently’ brought it to the worker’s attention that leave will be lost.
Going forward, we recommend that all employers should monitor the leave taken by employees and ensure that staff are reminded regularly, accurately, and in good time to take holiday, or risk losing it. Failure to do this could lead to costly claims for backdated holiday pay.
If you have any queries regarding holiday leave or pay or indeed any other employment related queries, please contact our expert Charlotte Braham on 01494 521 301 for further advice.