Holidays – are they all wrapped up?

A European Court of Justice (ECJ) case emphasises employers’ responsibility to encourage workers to take yearly statutory holiday entitlement.  

As Christmas approaches, marking the end of the holiday year for many, a recent ECJ case has concluded that statutory holiday entitlement will not automatically be lost at the end of a holiday year unless the employer has “exercised all due diligence” in bringing outstanding holiday to the attention of its workers. 

Under the Working Time Regulations 1998, employers can permit statutory holiday, not taken within the holiday year, to be carried over to the next holiday year.  This case rather suggests that an employer will be unable to refuse permission in certain circumstances. Contractual holiday entitlement is, of course, subject to the contract. 

The key for employers is – what does exercising “due diligence” mean in practice?

Employers who want to retain their right to insist that all statutory holiday entitlement be taken in the year it accrues need to ensure the following;

• All workers are aware of 1) the process for booking holidays – who they speak to, whether there is a notice requirement, if there is a limit to the number of days at any one time etc. 2) the risk of losing holiday if not taken.
• Workers are kept up to date on a regular basis as to their holiday allocation and the number of days remaining – this could be through email alerts, updates from line manager, company intranet etc.
• There is effective monitoring of holidays accrued and taken by all workers – preferably by a centralised HR department.
• Details of holiday requested and not granted are kept on record to ensure a consistency and fairness in decisions.
• Discussions are had with workers who regularly fail to use up their holiday allocation as to the reason – should there be operational changes? is it a communication issue? etc.

These processes are worth checking now so that the only horrible surprises post-Christmas are the credit card bills and not unexpected holiday rollovers!

Further information 

For more information about statutory holiday, please contact Matt Wort. 

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