Extra Bank Holiday - What every business must know

The 19th of September 2022 has been proclaimed a bank holiday for the Queen’s state funeral. This is a historic event and many employees will want to mourn the Queen, Britain’s longest-reigning Monarch.

Extra bank holiday – What does it mean for employers?

The normal bank holidays in England and Wales are eight, nine in Scotland and 10 in Northern Ireland. With the declaration of an extra bank holiday, many employees may automatically assume that they get a day off.

Employees are entitled to a minimum of 5.6 weeks (28 days) of paid annual leave entitlement. This is their statutory right as per the Working Time Regulations 1998. The minimum holiday entitlement may or may not include bank holidays. Some employers offer more than the statutory minimum annual leave entitlement. For example, an employer may grant an employee 25 days of annual leave plus bank holidays. Others may only give their employees the statutory minimum, 28 days, inclusive of bank holidays.

Goodwill Gesture

How an employer approaches the extra day will be determined largely by their terms and conditions of employment (the contract of employment). For employees whose contracts of employment only give them the minimum entitlement, or just the normal bank holidays (8 in England and Wales, 9 in Scotland and 10 in Northern Ireland), the employer may decide out of a goodwill gesture to grant the extra day as paid annual leave. Where the employer’s business requires employees to work on the extra bank holiday, the employee can take the additional day’s holiday on a different date. This can also be added as an additional entitlement for the employee to take within a certain timeframe or by the end of the holiday calendar year.

Employees Right to time off on bank holidays

Employees are not automatically entitled to time off on bank holidays. The entitlement is determined by what is stated in the terms and conditions of employment. Employees with contractual right to time off on bank holidays cannot be forced to work or disciplined for refusing to work. However, an employee who does not have the contractual right to time off on bank holidays days but refuses to work could be subject to a disciplinary action. This can be categorised as unauthorised absence. The employer may choose not to pay the employee for the absence.

Normal or Enhanced Pay for working on a bank holiday

An employer may pay enhanced rates for working on bank holidays. Employees are not automatically entitled to enhanced rates of pay. It is not a statutory right. An employee’s contract of employment may lay out the terms of pay for working on a bank holiday. It will state whether the organisation will pay employees their normal rates of pay or enhanced rates. Employers often offer enhanced rates as an incentive for employees whose contract gives them time off on bank holidays. On the other hand, an employee who is not entitled to time off may receive their normal salary.

Employers need to be consistent in their approach where payment of enhanced rate is not written in the contract of employment. Considerations must be given to customs and practices. For example, if the employer has paid enhanced rates in the past, employees may expect to be paid it in future.

What if an employee doesn’t normally work on a bank holiday

Employers with part-time employees must ensure that they are not treated less favourably compared to full-time employees. Employers must pro-rate bank holiday entitlement for part-time employees. Most bank holidays fall on Mondays and Fridays. A part-time employee who doesn’t work on Mondays and Fridays may lose out on bank holidays otherwise. Employers must factor this in when calculating and pro-rating annual leave entitlement for part-time employees.

Managing holiday rotas and schedules

Employers have to ensure that all holiday requests are handled openly, fairly, consistently, and in accordance with employment law.

Employers must design and implement fair holiday rota systems that will be favourable to all employees. For example, if the employer remains open all year round and does not close over bank holidays, the employer must ensure that their rota does not favour an employee or a particular group of employees over others.

Employers may ask employees to put in their annual leave request for bank holidays far more in advance than they might expect them to do for normal holidays. This will help the employer to plan and to ensure that they have enough staff for bank holiday cover.

Can an employer refuse an employee’s request for time off on a bank holiday?

Although an employee may not be automatically entitled to time off on a bank holiday, they can request time off. An employer can refuse to grant its request if it has strong business reasons for doing so. The employer must give the employee reasons for the refusal.

An employer may find themselves in the position of having to cancel a holiday request that they had previously approved. For example, due to heavy workloads and tight deadlines. To cancel a pre-approved holiday, the employer must give at least the same amount of notice as the period of leave cancelled plus one day. For example, if the employee requests 10 days off, the employer must give 11 days’ notice (10 days plus 1 day).

Employers must ensure that refusing or cancelling an employee’s holiday request will not mean that the employee is not able to take all their statutory annual leave entitlement.

Failure to give reasons for holiday refusal or cancellation and not allowing an employee to use their statutory minimum entitlement may result in a grievance or a claim against the employer.

Communication

Employers must communicate in good time to their employees whether they intend to grant them the extra bank holiday as time off. Employers must be clear on whether this will be paid or unpaid.

Where employers expect employees to work, they must ensure that employees are aware that they will be expected to be at work that day. With schools shut for the day, employees with childcare responsibilities may struggle to make alternative childcare arrangements. Advance communication will help employees make informed decisions and give them the opportunity to inform the employer of any potential issues.