In January 2007 the Employment Minister, Jim Fitzpatrick, announced the Government’s proposals to increase workers’ annual holiday entitlement (under the EU Working Time Directive) from 20 days to 28 days (for a full-time worker working five days per week).
This has been done to counteract the practice of some employers who currently include the eight bank holidays as part of the 20 days entitlement. Under the new proposals, employers would have to add the eight bank holidays to the existing 20-day entitlement.
The increase will be carried out in two stages, with the entitlement rising from 20 to 24 days on 1 October 2007, and from 24 to 28 days on 1 October 2008.
It is believed that up to six million workers will benefit from the changes. Research recently carried out by the DTI revealed that those most affected are women, part-time and low-paid workers, and employees from minority ethnic groups.
The Government’s aims in introducing the changes are said to be to protect vulnerable workers and allow reputable companies to compete on a level playing field with those giving employees the minimum holiday entitlement. The Government anticipates the cost to business to be around 0.4% of the wages bill – around £4 billion per year.
The Employment Minister said, “Most companies already recognise that good holiday provision makes good business sense. Holiday entitlement can be a key factor in recruiting and retaining staff. Holidays are important for productivity as they help minimise sick leave and keep people motivated and refreshed.”
The proposals will bring UK holiday entitlement closer to that of European counterparts. For example, workers in Ireland are entitled to 29 days, those in Austria are allowed 38 days.
The Government has not yet released details regarding the application of the proposals for part-time workers. What happens, for example, if a part-time worker does not work on Mondays (when most bank holidays fall)? Such workers could lose out unless they are given a pro rata entitlement.
The second consultation regarding the proposals is due to end on 13 April 2007, after which the Government should provide further details.
For further information contact David Seals on 01737 854573 or email david.seals@morrlaw.com
