Bank holidays, leap years and their impact on employment

This year contains a number of interesting dates that may have varying impacts on entitlements to pay and annual leave. With this in mind, Ben McCarthy, lead employment law writer and researcher at Croner-i, outlines what employers should bear in mind.

Many employers will already know that 2020 is a leap year, meaning that, for the first time since 2016, February contains an extra day. However, another development that may have slipped under the radar is 2020’s May Day bank holiday. Usually falling on the first Monday in May, it has been officially changed to take place a few days later on Friday 8 May in order to mark the 75th anniversary of VE day. Fast forward to December and we have Boxing Day, the last bank holiday of the year, on a Saturday. Faced with this rather interesting calendar, employers may wonder what steps, if any, they need to take to prepare.

29 February 2020

Ultimately, an employee’s pay entitlements on 29 February 2020 will depend upon whether they are salaried or receive pay according to the hours they work. Employees who receive the same basic pay every month are not entitled to any extra pay despite potentially working on this additional day. This is because, as salaried workers, they are paid a set salary for the year. As such, this extra day will be considered to already have been factored into their overall earnings. The only time this may change is if there is a term explicitly providing additional pay during a leap year within their contract; however, this is likely to be rare. Having said that, employers should always be mindful that this extra day, and therefore extra hours worked, does not send employee pay below the national minimum wage on average.

The situation does differ slightly if the individuals concerned are paid according to the hours they work or the amount of work they do. In this situation, they will be entitled to be paid for all of the time worked, which could mean they receive an additional amount if the extra day means they have worked more hours than usual. For example, persons who work irregular shifts and are asked to work on 29 February may end up coming out with more money overall in February.

8 May 2020

In May, the situation appears more complex. Because bank holidays often form part of an employee’s annual leave entitlement, employers should review the impact of any bank holiday adjustment on their usual practices. It is important to remember that employees do not have a stand-alone legal right to have a day off on bank holidays; instead, it is the contract of employment which dictates when time off can be taken. Therefore, employers should check the wording of workers’ terms and conditions to determine their position.

Some contracts may simply give employees an entitlement to time off on all bank holidays, or on “Early May Bank Holiday”, without giving any more detail. In this situation, they would be entitled to take a period of paid leave on the Friday, instead of the Monday. Other variations of contractual wording may include a specific entitlement for the worker to have a day off on the original date. This may put employers who shut down on bank holidays in the situation where workers are due to be on leave on a day the business remains open, and will be available for work on a shutdown day. This can be resolved by, for example, using any flexibility built into the contract to nominate alternative days of leave instead of the bank holiday itself, or by agreeing a temporary amendment to terms and conditions with workers to ensure leave aligns with the bank holiday dates.

This change also finds similarity to situations where additional bank holidays are added to the calendar for specific events, such as Prince William’s wedding in April 2011 or the Queen’s Jubilee in June 2012. Again, employers in this situation should refer to their contract of employment; they will not be contractually obliged to allow this additional day’s leave unless annual leave entitlements are expressed as including all public or bank holidays. Contracts that specifically list all bank holidays the employees will be entitled to take off will also not have to honour the additional day if it is not included. Of course, if employers are feeling generous, they can choose to let staff take the day off paid. They may also consider allowing the day unpaid, but they would need to make sure that employees are still allowed to take their full statutory entitlement to annual leave at another time in the leave year.

26 December 2020

For December, it is also important for employers to be aware of another bank holiday change. As Boxing Day falls on a Saturday, the corresponding bank holiday is to be moved to the next working day — Monday 28 December. This means that all employees who are contractually entitled to take Boxing Day off work will therefore have the right to take this on the Monday. Similarly, in 2021, Christmas Day falls on a Saturday and Boxing Day on a Sunday, meaning that both the next Monday and Tuesday would be classed as bank holidays. These days will also be bank holidays in 2022 where Christmas Day falls on a Sunday. This is because the holiday usually provided on Christmas Day would be taken in lieu on Tuesday, following Boxing Day on Monday. Although complicated, employers should bear in mind that, as with leap years, this situation only happens every few years.

Conclusion

Generally, it can be relatively straight forward to plan ahead for bank holiday dates or any changes expected in the next few years. As 2020’s May Day change has proven, there can be situations where alterations to the calendar are made unexpectedly. It is important that employers maintain clear terms within a contract of employment that take such situations into account.

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