Paid Annual Leave part two: an employee's rights and entitlements |
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| Introduction |
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| This article is based on the 1998 Working Time Regulations. They have been updated numerous times since 1998. This article includes the latest updates. |
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| The article will be useful to both employers and employees. It states what both parties must do to comply with the regulations for holiday pay and leave, as well as ways of redress. Working time regulations are in place to protect workers from being over-worked. Paid annual leave is an important factor in ensuring that every worker receives a rest period. |
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| If you are self-employed, running your own business and are free to work for different clients and customers, these regulations do not apply to you. |
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| The basics |
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| Annual Leave: Every worker - whether part-time or full-time - covered by these regulations is entitled to 4.8 weeks (24 days if you work a five day week) pro-rata for those working part-time. This will increase to 5.6 weeks (28 days if you work a five day week) from 1 April 2009. |
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| The leave entitlement under the regulations is not additional to bank holidays. There is no statutory right to take bank holidays off. Workers must give the employer notice that they want to take leave. |
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| Employers can set the times that workers take their leave, for example for a Christmas shutdown. If a worker’s employment ends, he or she has a right to be paid for the leave time due and not taken. |
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| Who is entitled to paid annual leave? |
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| The entitlement to paid annual leave, including the right to compensation payments for untaken leave when you leave your job, begins on the first day of employment. |
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| However, the employer can optionally use an accrual system whereby during the first year of employment the proportion of the leave which may actually be taken (with the employer's agreement) builds up over the year. The amount of leave which may be taken builds up monthly in advance at the rate of one-twelfth of the annual entitlement each month. |
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| Where this calculation does not result in an exact number of days, the amount of leave which may be taken is rounded up to the next half day. Any rounded-up element is deducted from the leave remaining. |
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| What is a week’s leave? |
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| A week’s leave should allow you to be away from work for a week. It is the same as the length of time you work in a normal week. |
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| Giving notice to take leave |
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| Employers and workers can agree how and when to give notice of when leave is to be taken. |
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| In the absence of an agreement the notice period that a worker must give should be at least twice the period of the leave to be taken. An employer may refuse the worker permission to take leave requested within a period equivalent to the period of the leave. |
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| Calculating a Week's Pay |
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| The following describes the minimum a worker should be paid for their leave entitlement under the regulations. |
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For workers paid a fixed wage or salary (fixed hours and pay) |
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If you are a worker whose normal working hours do not vary, a weeks pay is the pay due for the basic hours you are contracted to work. Pay for overtime hours is not included unless it is guaranteed overtime, i.e. required by the contract between you and your employer. |
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For piece workers or workers on commission (hours constant and pay varies) |
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If you are a worker whose pay varies with the amount of work done (such as with piece work) or when a weeks pay is partly made up of variable bonuses or commission directly related to that weeks output, then a week’s pay is your average hourly rate multiplied by your normal working hours. |
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| To calculate your hourly rate: |
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- Divide your weekly pay over the previous 12 weeks by the number of hours you worked during the same period (the pay and hours of non-compulsory overtime is excluded). Any week in which you receive no pay is replaced by the week before the 12 weeks when you were paid, to bring the total to 12;
- If you are on commission or performance-related bonuses, 12/13 of any quarterly bonus or 12/52 of any annual bonus is included. Only bonuses specifically related to a week’s work should be included; general ‘‘profit-sharing’’ or other such bonuses are not included;
- A weeks pay is the total eligible pay (excluding voluntary overtime but including relevant bonuses) over the 12-week period divided by 12.
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| For shift workers (hours and pay vary in a set pattern) |
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| If you are a shift worker and you work a set pattern but the hours you work and the money you earn each week vary, you can work out your week’s pay by finding the average number of hours you work each week and your average hourly rate. |
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| If you are a piece worker, you can work out your average hourly rate in the same way; i.e. add up how much you have earned over the past 12 weeks and divide it by the number of hours you have worked. You should not include voluntary overtime in either of these calculations. |
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| For workers who work irregular hours (hours and pay vary) |
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| If you do not work regular hours - you may be an agency worker who works different hours every week or a sales representative who gets paid commission only –– you should average your pay out by adding up all your pay for the past 12 weeks and dividing it by 12. If you did not earn anything during one week, add in the pay from the week before the 12th week to bring the total up to 12. |
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| Redress |
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| If you are a worker and you feel you are not receiving your entitlements, we suggest you take the following steps: |
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- Talk to your manager, you may be able to settle the matter straight away;
- Contact a trade union representative (if you have one). They will be able to advise you what to do;
- If you cannot resolve the matter, you can make a claim at an employment tribunal;
- If you want to make a claim under the regulations, the Advisory, Conciliation and Arbitration Service (ACAS) will offer the services of a conciliator to help the employer and worker to reach a settlement without the need for a tribunal hearing. Part of the conciliator’s role is to explain how tribunals work and how a tribunal arrives at decisions. This service is free of charge;
- If you want to take a complaint to a tribunal, you should do so within three months. The tribunals offer an informal way of ensuring that workers are given their rights. These tribunals generally have three members: a legally qualified chairperson and two other lay members who have;
- Experience of dealing with work-related problems.
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