Have your employees got any holidays left?

It has recently become necessary to remind your employees that they have to use any unused holiday up by the end of the year. 

Previously, if the employee hadn’t taken their holiday, they would lose it and they would not be able to carry it over to the next year. However, as the case shows below, you will now need to give the employee the opportunity to use it. 

Recently at the Court of Justice and European Union the case for Max-Planck-Gesellschaft v Shimizu, asked if a employee doesn't apply for the minimum annual leave due under EU law during a leave year, the right to have that leave lost at the end of the year, unless the employer diligently gives the worker the opportunity to take it. 

Mr Shimizu who worked at the Max Planck Institute, a private scientific support institution in Germany, until 2013, brought a claim for unpaid holiday from 2011 and 2012. 

Under German law, he lost the right to carry over untaken leave from one year to the next. The German Federal Labour Court referred two questions arising to the CJEU.

The CJEU held that the Working Time Directive requires that if a worker does not exercise the right to paid annual leave in any year, leave should not automatically be lost unless the employer has 'diligently' brought it to the worker's attention that leave will be lost, the burden of proof falling on the employer. 

Employers need not require employees to take leave, but must inform them accurately and in good time of the right. If your holiday leave ends on 31 December 2018, it is important that you remind your employees that they have to take the remainder of their annual leave entitlement or they will lose it. 

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National Minimum Wage increase in April 2018

Year                             25 and over     21 to 24           18 to 20           under 18         Apprentice

April 2017                    £7.50               £7.05               £5.60               £4.05               £3.50

April 2018                    £7.83               £7.38               £5.90               £4.20               £3.70  

In April the increase to national minimum wage comes into effect.  Employers should make changes to employees salary increase and plan for the increase now.

Does your holiday year run from 1st April – 31st March?

If so, the information below is important to you as an employer:

The way in which the 2018 Easter break falls means that in England and Wales the Easter bank holidays will straddle both March and April. In 2018 Good Friday falls on 30^th March and Easter Monday falls on 2^nd April. The following year Good Friday is on 19^th April 2019 whilst Easter Monday is on 22^nd April 2019.

Therefore, if your holiday year runs from April – March employees would appear to lose out. This is because there is no Good Friday bank holiday within a holiday year running from 1^st April 2018 to 31^st March 2019.

The statutory 28-day entitlement is a legal minimum and as the employer you cannot negotiate out of it, other than by an agreement with the workforce to carry forward up to eight days holiday into the following year. If you are an employer in this position it is advised that you top up the employee’s holiday entitlement for the leave year running 1^st April 2018 – 31^st March 2019 as this will ensure the employee receives their 28-day statutory entitlement. This situation will occur again but not until 2024!

Employer’s pension contributions count towards a week’s pay

It has been long standing practice that when calculating a week's pay for redundancy payments and certain employment tribunal awards, that employer pension contributions are not included. However, the Employment Appeal Tribunal (EAT) has recently held, in the case of University of Sunderland v Drossou that the calculation of a "week's pay" under s.221(2) Employment Rights Act 1996 should include employer pension contributions, and not just be the basic pay.

A week's pay for calculating redundancy pay is currently capped at £489 and this decision does not alter the level of the cap. Depending on the amount that the employee earns and if it is less than £489 per week they may receive more now due to the employer’s pension contributions being taken into account. 

Contact us if you would like assistance on calculating redundancy payments on 01245 261883