Do you operate a holiday year from 1st April – 31st March? If so watch out!

Attention employers! Due to the way that the Easter bank holidays fall this year and next year, it is anticipated that some employees’ holiday rights may be breached next year. Depending on the amount of holiday entitlement afforded to employees, together with the wording of their contract, employers may find themselves liable for an unanticipated shortfall in an employee’s holiday entitlement next year.

Employers who operate a holiday year from 1 April through to the 31 March are advised to review their employees’ contracts to see if annual leave entitlement is stated as being 20 days plus bank holidays.  If so, this year employees will be entitled to an extra day of leave as Good Friday is on 30 March 2018 which means that there are 9 bank holidays instead of 8 bank holidays this year.  Employers should be aware that failure to provide for 20 days’ holiday plus bank holidays (if this is stated in the employment contract) will leave the employer in breach of contract. Employers cannot reduce their employees’ holiday allowance in the holiday year 1 April 2017 – 31 March 2018 without breaching employees’ contract of employment, unless this is agreed with employees.

If the employment contract states that an employee is entitled to be paid for the ‘8 bank holidays’ per year then employers will not need to pay employees if these choose to take off the 30th March 2018 as this is in excess of the holiday entitlement set out in their contract.

A problem may then arise next year because there may only be 7 bank holidays instead of 8 bank holidays between 1 April 2018 and 31 March 2019. If the contractual entitlement is 20 days plus bank holidays this will technically leave employees with just 27 days’ annual leave – less than the 28-day statutory minimum. Affected employers will need to ensure that their employees are provided with at least the statutory minimum of 28 days’ annual leave in the period running 1 April 2018 to 31 March 2019.

We would advise employers to be aware that any unilateral change to holiday entitlement, without the agreement of employees will leave the employer in breach of contract. Please do not hesitate to contact us should you be concerned about the effect that this anomaly will have on your business or if you would like us to advise you on interpreting the relevant clause in your employee’s contract.