Phasing in of increase
Following its initial consultation, the government has chosen to phase in the increase in holiday entitlement. This means the statutory entitlement to paid leave will initially increase from four weeks to 4.8 weeks from 1 October 2007 (i.e. 24 days for those on a five-day week) and then a further increase to 5.6 weeks on 1 October 2008 (i.e. 28 days for those on a five-day week), subject to a maximum of 28 days.
There is no qualifying period for the additional entitlement but in the first year, employers will be able to limit workers from taking more leave than they have accrued to date in the same way as the current entitlement.
Payment in lieu
Again, having considered the responses to the initial consultation, the government has elected not to allow the additional eight days’ leave to able to be bought out. This freedom would, however, remain for any extra contractual days (five in the case of most EEF members).
Carrying forward leave
The government has, however, decided to allow the parties to be free to agree that the additional eight days’ leave can be carried over to the next holiday year.
Impact of the proposals
Whilst it might appear that the proposals will not impact on those who already provide holiday equivalent to or in excess of the proposed new maximum, that is not necessarily so.
There will be effectively three regimes applying to different parts of the leave entitlement. The first 20 days will be subject to the existing regime permitting no carry forward or pay in lieu, the next eight days will be subject to a different statutory regime permitting carry forward but no pay in lieu. Finally, in relation to the remaining contractual days, the parties will have complete freedom to agree to pay in lieu and carry over provisions.
Remember, for many workers, the holiday year will not begin on 1 October, so there will be a pro-rating exercise to be carried out. But the government is proposing to make available an online calculator to help employers work out the entitlement.
We need your input
Having already consulted on the broad principles, the government is now consulting on detailed proposals to implement its commitment. It is seeking views on
• whether there are there any other possible consequences of these Regulations, which the government might not have anticipated;
• any specific suggestions for additional steps it might take e.g. make available draft standard letters and an on-line holiday calculator, which might make it easier for employers to implement these regulations; and
• whether there any particular issues which should be covered in the guidance.
Please send any comments to us by no later than 31 March 2007.