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Holiday calculation problem for a departing employee

Holiday calculation problem for a departing...

I wonder if I could have some guidance in calculating the remaining holidays for an employee who has chosen to terminate her contract and will be leaving the company at the end of September.

The employee is entitled to 31 days holiday this year (20 days + 11 public holidays).

However, this is made slightly more complicated by the company requirement (Employee Handbook) which states that employees are required to take 1st January, 25th December, 26th December as compulsory holidays as the office is closed on those days. All other public holidays are flexible – employees can either take them when they fall or take a day in lieu if preferred, with their manager’s agreement.

So, to get to the point, as this employee will be leaving at the end of September would her holiday entitlement for the nine months she has worked be 9/12 x 31 days or 9/12 x 29 days?

In other words, is it correct to exclude 25th December and 26th December from the entitlement?

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26th Jul 2012 12:06

Yes exclude these 2 days

David

What's the policy on the "public holidays"? A term not defined by the WTD.

It looks like you have 29 flexible days and 2 fixed days.

Assuming no further holidays are taken in the notice period it's likely to be 9/12 x 29. then depending on any rounding policy - (usually rounded to nearest day or half day) I'd make it 22 days. take off the days taken and bob's your uncle. The 1st Jan has been taken and paid, the 25th and 26th are oiutside the relevant time frame.

 

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26th Jul 2012 12:22

I agree

I have only ever included core (i.e. excl. public) holidays in such calculations.  The only difference would be if they had worked a PH and were due a lieu day.  Otherwise if they are there they take them, if they are not, tough!

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26th Jul 2012 13:37

The numbers don't add up

How do you get to 11 public holidays?  I make it the 8 usual bank holidays plus 1 extra for the Jubilee - 9 in all.

@Democratus - "It looks like you have 29 flexible days and 2 fixed days."  If the total is 31 days of holiday and 3 are compulsory, I make it 28 flexible and 3 fixed days.

However, I agree with the concept of ignoring bank holidays.  If the entitlement is 31 days less 9 bank holidays, I would calculate on 9/12 of 22.  If the entitlement is 20 days as stated, I would calculate on 9/12 of 20.

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26th Jul 2012 14:05

Sorry, disagree with everyone - but it's all in the wording!

Forgive me if I'm mistaken, but I think everyone is confusing the holiday entitlement with an entitlement to choose when to use the holiday.

As I read it, the contract entitles the employee to 31 (agree with Euan about questioning the 11 days for bank holidays though!) days holiday for the year so this is the figure that must be used in the calculation.  The two Xmas days haven't been used by the employee so she is still entitled to them as part of the final calculation.

This might help:

http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1074415038&type=RESOURCES

So I make it (9/12)x31 (rather than 29), less any holiday used.

However if the contract says something like 'you're entitled to 20 days plus bank holidays' then elsewhere 'we shut on the 25th and 26th and will pay you without deducting it from your entitlement' then I think this is a different picture...  I don't get this impression from the OP though.

Regardless of the wording, the minimum is 28 days per annum so you can't ignore the bank holidays and calculate it on 20 or 22 though.

 

Sorry!

Pat

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By david j
26th Jul 2012 14:45

clarification

In answer to a couple of points made, to clarify:-

The company is based in Scotland where there are usually 10 public holidays but 11 in 2012.

Contract states "...the employee shall be entitled to 20 paid holidays in addition to the usual 10 public hols"

Employee handbook states " Employees are required to reserve up to four days of their annual entitlement to cover the shutdown of the company on 25 and 26 December and 1 and 2 January each year if they fall on their normal working days. "

Thank you for the replies so far. Initially we made the calculation based on 29 days. However the employee has questioned this so, with the help of this forum I'm hoping to bring this to a conclusion.

 

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26th Jul 2012 15:12

Of Course...

...There's always the last option of, not 20, not 22, not 29, not 31, but 30 days!!!  Based on your last post I'd suggest that, contractually, the extra bank holiday comes from the 20 days part of all of the employees allowances rather than being added on.  However the employer may have 'given' all employees the extra day though...

Also, my suggestions are based on my understanding of English law so if Scottish is any different then I've no idea!

 

Best of luck!

Pat

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27th Jul 2012 09:10

@ Euan - Oops

Yep you are right, i really think i shouldn't work with numbers some days, my job is mostly managing, reviewing and policy these days, but i should be able to subtract 3 from 31.

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By david j
27th Jul 2012 10:33

Still not 100% clear to me

Thanks again for your responses - Democratus, Richard, Euan and Pat.

I still don't quite see why it would be 31 days rather than 29 days. 

The employee handbook states that the company shuts down on 25th and 26th December and employees are required to reserve 2 days of their leave for those dates.

Surely that means that this employee effectively loses these 2 days because she will have left the company well before those dates?

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27th Jul 2012 11:52

They still accrue regardless

david j wrote:

Thanks again for your responses - Democratus, Richard, Euan and Pat.

I still don't quite see why it would be 31 days rather than 29 days. 

The employee handbook states that the company shuts down on 25th and 26th December and employees are required to reserve 2 days of their leave for those dates.

Surely that means that this employee effectively loses these 2 days because she will have left the company well before those dates?

 

I'm with the "31" people.

Supposing the company required everyone to take all their holiday at once in November December (In reality 2 week closedowns in factories are reasonably common so this isn't an entirely absurd analogy). Would anyone try to argue that someone who left in mid October having worked all year shouldn't be entitled to all their accrued holiday days worked as a proportion of the full year entitlement?

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27th Jul 2012 16:52

similar query recently

there was a similar query on this recently.

http://www.accountingweb.co.uk/anyanswers/question/calculating-holiday-e...

As pointed out in this thread, the holiday calculation should be based on the full holiday entitlement.

Quite simply, if an employee is entitled to 31 days annual holiday, then this is the figure you base your calculations on.

If you want to pay less as an employer, then you state this clearly in the contract of employment and advise the employee at the time you employ them.

 

 

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28th Jul 2012 21:27

Surely

the arguments about the employee somehow loosing the two Christmas days are a red herring, whichever base one uses to calculate from.  The clue is in the word 'accrue'.  They can't have 'lost' holiday if they haven't earned it by service in the year.

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29th Jul 2012 07:12

Exact wording?

We close down between Christmas & the New Year, and our contract of employment states that holiday entitlement must be reserved to cover this period, but the reserved days apply to what would be normal working days, not statutory days. 

As far as I am aware, an employee cannot insist on working during stat hols, and neither can an employer, unless it is part of the contract of employment.

So far as leavers go, I would work out the accrued holidays using both methods (including or excluding stat hols) and give the employee whichever is the most favourable for them. It won't make much difference unless the employee is on a massive wage, and it prevents time wasted arguing over it.

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