HR holiday and annual leave

Holiday and Statutory Leave HR Case Study

Holiday & Statutory Leave Case Study

An employee who took unpaid leave because his employer did not believe he was entitled to holiday pay has been allowed to make a claim for back payment of his statutory holiday pay entitlement for the duration of his employment

The Case

Mr Smith worked for a firm of plumbers as a casual worker. Whilst employed he was not given any contractual right to paid annual leave, so took unpaid time off work when he wanted a holiday or break from work. After resigning Mr Smith discovered that his status of a ‘worker’ entitled him to statutory holiday entitlement and pay, and so he made a claim for unpaid annual leave at an employment tribunal, claiming a breach of the Working Time Regulations and an unlawful deduction of wages. He also wanted to claim back a payment in lieu of any refused and untaken annual leave

The Tribunal Decision

The case went through various stages to ultimately be found in favour of Mr Smith. The court found that Mr Smith had the right to claim for compensation for leave that he had taken unpaid, as well as claiming compensation for the statutory leave entitlement that he did not take whilst employed. Other findings were:

  • The tribunal found that being required to guarantee availability is very different from being asked on occasion to help out (one can be refused whereas the other cannot) and so a fair comparator must be used if they are to be utilised as justification in refusing a flexible work request
  • A worker can only lose the right to take annual leave within the year (or have any remaining leave paid to them in lieu) if the employer can show that:
  • It specifically and transparently gave the worker the chance to take paid annual leave;
  • It encouraged the worker to take such leave; and
  • It informed the worker that they would forfeit their right to such leave if they did not take it by the end of the holiday year

Where the employer fails to meet this criteria, the worker’s right to leave will carry over to the next holiday period and accumulate until the termination of the contract. Upon termination, the worker will then be entitled to payment in lieu of any untaken or unpaid leave

Case Summary

This case clearly shows the need to have an effective holiday and statutory leave policy and procedure so that holiday requests can be addressed fairly and within the legal framework permitted

It also highlights the importance of ensuring managers are aware of how to schedule holiday leave so that full entitlements are utilised without adversely impacting on operational efficiency or performance, and to ensure the company is not faced with claims for back payments at the end of a holiday year

Ensure that your business has a robust Holiday and Statutory Leave HR Policy and procedures with our Holiday and Statutory Leave HR Pack.

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