Holiday Entitlements

Sick Leave and Annual Leave

If you are ill during your annual leave and have a medical certificate for the days you were ill, these sick days will not be counted as annual leave days. Instead, you can use these days as annual leave at a later date. An employer cannot require you to take annual leave for a certified period of illness.

Since 1 August 2015, you accumulate statutory annual leave entitlement during a period of certified sick leave. Employees on long-term sick leave can retain annual leave they could not take due to illness for up to 15 months after the end of the year in which it is accrued.

Long-term sick leave and annual leave

Many employers insist that you take your annual leave by a particular date, for example, the end of the calendar year. In 2009 the European Court of Justice (ECJ) ruled in case C-350/06 that employees who have not worked during the leave year because they are on sick leave, are entitled to their statutory annual leave for that year. According to this ruling workers are entitled to accumulate annual leave while on sick leave. This ECJ ruling also applies to a worker who was on sick leave immediately before leaving the employment. This means that the worker would be entitled either to carry over, or receive payment for, annual leave which was not taken because the worker was on sick leave.

Since 1 August 2015, an amendment to the Organisation of Working Time Act 1997 allows workers accumulate statutory annual leave entitlement during a period of certified sick leave. It also allows workers to retain annual leave they could not take due to illness for up to 15 months after the end of the year in which it is accrued. Workers who leave their employment within 15 months of the end of the year in which this annual leave was accrued, are entitled to payment in lieu of this leave which was untaken due to illness.

Employers need to have a clear understanding of their obligations under the Organisation of Working Time Act 1997 which governs holiday entitlements.  Entitlement to annual leave is set out in legislation and in your contract of employment.

Legislation gives various entitlements to leave from work. These include annual leave, public holidaysmaternity leaveadoptive leavecarer’s leaveparental leave and other types of leave from work. It is also important to note that the periods of leave provided for by legislation are the minimum entitlements only, employees and employers may agree to additional entitlements.

Holiday Entitlements

There is no qualifying period for holiday entitlements and all employees’ regardless of status, service or age, qualify for paid holiday entitlement. When calculating holiday entitlement, all time worked qualifies for paid holiday time, including overtime hours worked.

How to calculate Holiday Entitlements

Since 1st April 1999, depending on the time worked, an employee’s minimum holiday entitlements should be calculated by one of the following methods;

  • A minimum of 4 working weeks in a leave year in which the employee works at least 1,365 hours (unless it is a leave year in which he or she changes employment). For an employee who works a 5 day week, this is equal to 20 days paid holiday in a year. An employee who works a 3 day week is also entitled to 4 weeks holidays, but this amounts to 12 working days (4 weeks x 3 days per week). While an employee is entitled to a minimum of 4 weeks holidays in a year, there is nothing to prevent an employer from providing an employee with an annual leave entitlement in excess of 4 weeks, but this is purely a matter between the employer and the employee.
  • 1/12th of the annual holiday entitlement for every calendar month in which the employee works at least 117 hours. For an employee entitled to the minimum entitlement of 20 days annual paid holidays, this is equal to 1 and  2/3 days (20 divided by 12) of paid holidays per month. For an employee entitled to 30 days annual paid holidays by virtue of their contract of employment, this is equal to 2 and ½ days (30 days divided by 12) paid holidays per month.
  • 8% of the hours an employee works in a leave year (but subject to a maximum of 4 weeks).

If more than one of these provisions applies to an employee and the results are not the same, the employee is entitled to whichever result is the more advantageous for them. An employee who works for eight or more months in a leave year is entitled to take two-unbroken weeks’ leave.

Can Employees pay more or less that the statutory holiday entitlement? 

An employee’s contract can give more than the statutory minimum holidays, e.g. a teacher can receive 3 months, or more, paid holidays in a year. However, any additional holiday entitlements in an employment contract cannot be enforced under the legislation, since this legislation merely specifies the minimum holiday entitlements of an employee.

How much do employers have to pay for a day’s holiday entitlement? 

An employee is regarded as having worked on a day of annual leave or on a public holiday, the hours he or she would have worked on that day, if it had been a normal workday. So when calculating hours worked, credit must be given for the normal hours, which would have been worked on a day of annual leave or a public holiday, if that day had been a normal working day.

What is the holiday entitlement for a part time employee?  

Part-time employee’s annual leave entitlement is calculated in a similar manner as a full-time employee based on whichever of the above 3 methods is appropriate depending on the number of hours worked by the part-time employee. This provision has not been altered by the terms of the Protection of Employees (Part-time Work) Act 2001.

In practice, what this means is that an employee who works regular part-time hours. E.g. 7 hours per day, 3 days a week, will be entitled to a minimum of 12 days (3 days x 4 weeks) annual leave per year under the Act. On first glance it may appear that the holiday entitlement should be calculated as 8% of the hours worked, as this employee will not exceed 117 hours per month or 1,365 hours per year, but the 8% calculation is subject to a maximum of 4 working weeks per year. If the employee was to commence or leave mid-year, the annual leave calculation may need to be calculated based on the 8% of the hours worked in the year of commencement or cessation.

If the hours are irregular, how do I work out the holiday entitlements? 

Where an employee works irregular hours, their annual leave should be calculated using 8% of hours worked, subject to a maximum of 4 working weeks for that employee which can be averaged over a 13 week period.

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