Happy Holidays – How to Handle Annual Leave and Public Holiday EntitlementsPosted in : How Do I Handle It ROI on 20 December 2017
With the festive season fast approaching most employees are looking forward to celebrating Christmas away from the work place. Others are facing into one of the busiest times of the year.
Consequently leave entitlements are a hot topic for employers and employees and queries are flooding in. With that in mind it is important to recap on annual leave and public holiday entitlements.
The Organisation of Working Time Act 1997 provides that full-time employees are entitled to a maximum of four working weeks annual leave where they have worked 1365 hours. Part-time employees are entitled to 8% of the hours worked in an annual leave year or 1/3 of a working week each month where they work at least 117 hours, whichever method gives the greatest entitlement, up to a maximum of 4 working weeks.
Employers are free to grant additional annual leave days, over and above statutory and these are usually set out in the contract of employment.
For those employees who unfortunately succumb to illness over Christmas their annual leave day will be regarded as a sick day once they furnish a medical certificate to that effect.
Many employers will require employees to take compulsory days at Christmas whilst others will impose a blackout on employees taking annual leave over Christmas. This is acceptable under the Act which provides that the times at which annual leave can be taken is determined by the employer having regard to work requirements. This, however, needs to be reconciled against family responsibilities and rest and recreation. It is advisable to include any compulsory or black out days in the contract of employment. Consideration should also be given to rotating employees where possible so that employees have some time off over Christmas.
Employment contracts often specify that annual leave year runs from January to December and annual leave cannot be carried over. If employers are minded to strictly enforce this requirement then employees should be afforded an opportunity to take leave prior to end December.
There are three public holidays occurring over the Christmas period. These are:
- Christmas Day - 25th December
- Saint Stephen’s Day- 26th December
- New Year’s Day - 1st January
This entitlement is available for all full time employees and part-time employees who have worked at least 40 hours in the previous five weeks ending on the day before the public holiday.
An employee is entitled to whichever of the following the employer decides:
a) a paid day off on the day;
b) a paid day off within a month of that day;
c) an additional day of annual leave;
d) an additional day's pay.
An employee may request to be informed of which option the employer intends to apply at least 21 days in advance of the public holiday. If the employer fails to give this information at least 14 days before the holiday then the employee will be entitled by default to a paid day off on the day. Although employers are only obliged to give notification within this time frame where requested to do so by the employee, it is good practice to give as much notice as practicable of the option that the employer intends to apply.
Pay for public holidays
This is set out under the Organisation of Working Time (Determination of Pay for Holidays) Regulations 1990
Where pay does not vary in relation to work done (i.e. a standard hourly rate applies without a performance related bonus)
1. An employee who works on or is normally required to work on the day on which a public holiday falls:
The payment for the public holiday will be a sum equal to the normal daily hours last worked by the employee before the public holiday (including any regular bonus or allowance the amount of which does not vary in relation to the work done).
Example 1: John works 8 hours on the public holiday. His last normal day’s work prior to the public holiday was also 8 hours. His entitlement for the public holiday is 8 hours plus 8 hours = 16 hours pay.
Example 2: John is normally scheduled to work on the day on which the public holiday falls; however, the office is closed. In these circumstances, John does not work on the day and is entitled to 8 hours pay – the amount equal to his last normal day’s work prior to the public holiday.
2. An employee who does not work on and is not normally required to work on the day on which the public holiday falls:
The payment for the public holiday will be a sum equal to one-fifth of the normal weekly hours last worked by the employee before the public holiday (including any regular bonus or allowance the amount of which does not vary in relation to the work done).
Example: Olivia normally works 25 hours per week Monday to Friday. Saturday is a public holiday. Olivia does not normally work on Saturdays and is not scheduled in to work on the public holiday in question. Her entitlement is to 1/5 of 25 hours = 5 hours. If the office is closed, then Olivia’s entitlement remains the same.
Pay for public holidays has been the subject of a number complaints to the WRC and Labour Court. In Moriarty Supervalu and A Worker “normal daily hours” was the issue in dispute. The Claimant worked 4 hours on a Wednesday, 7 hours on a Saturday and 8 hours on Sunday. Therefore, although the daily hours worked varied in that they were not the same hours each day, the hours were set and those were the hours worked by the Claimant. The Rights Commissioner determination, which was upheld on appeal by the Labour Court, was that if the worker does not work on a public holiday she is entitled to one-fifth of normal weekly hours, i.e. one-fifth of 19 hours. If the worker does work on the public holiday, she will receive the normal daily hours last worked by her before the relevant public holiday.
This case indicates that pay is calculated with reference to hours worked on the last day worked before the public holiday, even is this produces a stark difference in the pay received by the worker. In other words, as the worker in question worked 8 hours on a Sunday, if that was the last day worked before the public holiday, she would be entitled to 8 hours pay for the public holiday. Equally, if the last day worked before the public holiday was a Wednesday, she would only be entitled to 4 hours pay for the public holiday.
A similar result was reached in the decision of Cadbury Ireland Limited and SIPTU. In this case, the employer argued that it was custom and practice that workers received 8 hours pay for the August public holiday. However, certain shift workers were transferring to day shift and had worked 10 hours on the last working day of the previous week. The Labour Court overturned the decision of the Rights Commissioner and held in favour of the worker.
A different division of the Labour Court considered the matter in the Revenue Commissioners and Gerard Doyle. In this case, the employees worked under a work-sharing scheme and worked half days on each Monday and Friday and full days on Tuesdays, Wednesdays and Thursdays. The Claimant was scheduled to work 80% of the working time of a full-time member of staff and was paid 80% of a full-time salary. When a public holiday fell on a Monday or Friday the Claimant was given that day off and paid as he would have been paid had he worked on the day in question, i.e. a half days pay. The Claimant submitted that he should be entitled to a full day’s pay or a day off in lieu in respect of those public holidays.
The Labour Court held that if the public holiday fell on a day which the employee did not normally work, i.e. a Saturday or a Sunday, and the employer chose to then give the benefit of the public holiday on the following Monday, the employee was entitled to one fifth of his average weekly earnings by way of pay for that public holiday entitlement.
If, however, the public holiday fell on a Monday or a Friday on which the employee was rostered to work for part of the day, he should be paid an average daily rate based on his contracted working arrangement, i.e. one-fifth of his weekly rate of pay which is 6.56 hours. The Labour Court went on to determine that if the public holiday fell on a Tuesday, Wednesday or Thursday, on which the Claimant would have been scheduled to work a full day, he should receive a paid day off on that day.
Under the reasoning in the Doyle case a pro-rata benefit should be given to employees where a public holiday falls on a day where they are contracted to work part of the day, rather than the interpretation in the Moriarty Supervalu case, which would involve applying the daily hours last worked by the employee prior to the public holiday. Doyle could perhaps be distinguished from the previous two cases on the basis that the employees worked under a work-sharing scheme.
Annual leave and public holidays are therefore issues that required great consideration by employers this Christmas. The key is to have your arrangements made well in advance so that employees can be informed in good time as to what is expected of them and what they can expect over the festive period so that everyone has a “happy holiday!”.
More on Working Time & Leave
- How should employers calculate annual leave entitlement for employees who work irregular hours?
- Is an employee who leaves employment automatically entitled to an allowance in lieu of annual leave?
- Should commission payments be included in the calculation of holiday pay?
- Must a company insist that annual leave must be taken within the leave year?
- In Brief: Important Updates from June 2018
The information in this article is provided as part of Legal-Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article.