Bank Holiday Pay: a true diamond

Scotland
To allow workers to enjoy the recent Diamond Jubilee celebrations, an extra public holiday was scheduled for Tuesday 5 June (with the late May bank holiday moved one week later, thereby making a four-day long weekend). The Government had stressed that it was keen that employees would be allowed time off to be able to participate in the celebrations.  

Many employers may have been unsure as to the legal position in respect of such extra public holidays. 

Statutory rights to time off

There is no statutory right to time off on bank holidays. Any such right depends on the terms of an employee’s contract of employment, and the wording of holiday provisions within individual contracts of employment will therefore be key in determining whether an employee is entitled to the day off work. There are two different possibilities for how a contract might be worded.

Contract wording

If a contract states that an employee is entitled to (for example) 28 days’ holiday including bank holidays (option 1), there will be no legal right to an additional day off for special bank holidays.

If, however, the contract states that the employee is entitled to 20 days’ holiday plus bank holidays (option 2), the employee is entitled to take the additional day off – unless the contract specifically identifies those bank holidays which are recognised by the employer.

Employers should check the wording of their employment contracts (bearing in mind that wording between contracts in one organisation may vary, especially if different template contracts have been used over time). The terms of the contract (i.e. whether the wording matches option 1 or option 2) should then be the starting point for any decision regarding whether to allow employees time off.

If employers are at all unclear as to which category applies, legal advice should be sought to ensure that employees’ contracts of employment are not breached.
 
Bank holiday pay

If an employee is entitled to the day off on a public holiday, then they will be entitled to their normal rate of pay for this (in the same way as they would for any other holiday). Contrary to popular belief, for those working on a public holiday, there is no entitlement to extra pay (or a day off in lieu), unless the terms of the person’s contract state otherwise. However, if employees are normally paid extra for working a bank holiday (even if not stated in their contract), that should apply on additional public holiday days too.
 
A normal working day

If the terms of employees’ contracts do not entitle them to the day off, employers are within their rights to treat an extra public holiday like any other normal working day and expect staff to work. Employers may wish to consider whether to exercise some discretion to allow individuals to take the day off in any event. However, there is no obligation for them to do so. There are a number of key points employers may wish to consider, however.

Grey Square
It is important to communicate any decision with employees early. If they are not getting an extra day off, employees are likely to be disappointed, especially when they may already have planned to spend this time with friends or family (or possibly even attend some publicly organised events, depending on the occasion). This message should therefore be communicated as early as possible.  Employers should also be prepared to justify their decision.
Grey Square It should be borne in mind that the decision not to give staff a day off can result in a blow to industrial relations. In the past, some trade unions have decided to “name and shame” those firms that were not allowing employees time off in order to increase pressure on employers. Furthermore, according to reports, a number of collective grievances were lodged about the failure to allow time off for the Royal Wedding last year.
Grey Square Employers should also be prepared for increased sickness or absence rates if not allowing employees to take extra public holidays. It is therefore a good idea to reinforce absence policies prior to any such holiday in an attempt to decrease absence rates during this time.

Part-time employees

When an extra public holiday is announced, employers may well face complaints from part-time staff who are not entitled to the holiday. These complaints should be handled with care.
 
Due to the way that holidays tend to be expressed in part-time workers’ contracts (i.e. referring to a total number of days annual leave), it is more likely that they will not be entitled to the day off than someone who works full time.

Furthermore, some employers may decide to only give the day off to those employees who are due to work on that day. This could leave part-time workers feeling as if they are being treated less favourably than their full-time counterparts (and wanting to bring a claim on this basis).
 
There has been a slight divergence in the approach taken by the courts in England and Scotland on this issue. In the leading case in Scotland, McMenemy v Capita Business Services Ltd, it was accepted that the reason for the employee being refused extra days off was not his part-time status, but the fact that he did not work Mondays. However, a key feature in this decision was the fact that the business in this case operated seven days a week, and both full-time and part-time workers could work patterns which did not include Mondays.
 
However, more recent cases in England have moved away from the requirement that an employee’s part-time status must be the “sole” reason for the treatment. It suggested that part-time status needs to be only one of the reasons for less favourable treatment (or the effective and predominant cause). This casts doubt on whether the approach adopted by the Scottish courts would be followed, and potentially makes it more likely that an employee would be able to succeed with a claim for less favourable treatment as their part-time status would be one of several reasons for them not being allowed the extra holiday.
 
Ultimately, how such holidays are handled is a question for every individual organisation, as each business is different.  However, employers will no doubt be relieved to know that there are currently no additional public holidays planned for 2013!
 
This article first appeared in 'Pay & Benefits'.