An additional bank holiday will take place on Monday, 8 May this year, to mark a weekend of celebrations following the coronation of His Majesty King Charles III on Saturday, 6 May 2023.
Whilst the additional bank holiday will give people across the United Kingdom the opportunity to come together and welcome His Majesty to the throne, employers will need to understand the implications of this extra public holiday for their businesses and staff.
Many people assume that they are automatically entitled to an extra day off when the Government announces an additional bank holiday.
However, the picture is not as simple as that, and an employee’s entitlement will largely depend on the specific wording in their employment contract.
Below are three common ways that holiday entitlements may be drafted in a contract of employment, which will lead to different treatment of additional bank holidays.
One common way that employment contracts deal with holiday is to set a fixed entitlement per year (e.g., 35 days) which is stated to be ‘inclusive of bank holidays’.
In typical years where there are only eight bank holidays, this language entitles the employee to take those eight bank holidays off, plus another 27 days (i.e. 35 less 8) at their choosing throughout the year.
In a year where there is an extra bank holiday, the employee is entitled to take the nine bank holidays, but their remaining holiday entitlement for the year is reduced to 26 (i.e. 35 less 9).
Effect for employer: In this situation, the employer must allow the employee to take time off on the additional bank holiday.
Effect for employee: The employee is entitled to take the extra bank holiday off, but it will count towards that employee’s yearly holiday entitlement.
A second way employment contracts can be drafted is to fix the number of holiday days which the employee is entitled to take per year (e.g., 25 days), plus the usual eight bank holidays.
In a typical year with eight bank holidays, calculating holiday entitlement is as straightforward as: 25 + 8 = 33.
In a year with an ‘unusual’ extra bank holiday, if there is no explicit clause in the employment contract entitling the employee to take the extra bank holiday, they are still only entitled to 25 + 8 = 33 days off.
Effect for employer: In this situation, the employer has lots of discretion. It can require the employee to work the additional bank holiday, or it may allow the employee to take the time off out of their holiday entitlement.
Alternatively, if the employer decides to close business on the additional bank holiday, it can mandate that its employees take the day off using one of their statutory holiday days. However, to do this, the employer must first notify all affected employees at least two days in advance.
Effect for employee: The employee is not automatically entitled to take the extra bank holiday off, and they will have to wait to hear what approach their employer intends to take to the additional bank holiday.
A more generous employment contract will fix the number of holiday days which the employee is entitled to take (e.g., 25 days), which can be taken in addition to any public holidays.
In a typical year where there are eight bank holidays, an employee with this type of contractual provision would be entitled to 33 days (i.e., 8 + 25).
However, in an unusual year where there is an extra bank holiday, the same employee would be entitled to 34 days (i.e., 9 + 25).
Effect for employer: In this situation, the employer must allow the employee to take time off on the additional bank holiday.
Effect for employee: The employee is entitled to take the extra bank holiday off, and it will not count towards the employee’s yearly holiday entitlement.
For an employer, understanding your employee’s contractual rights regarding the additional bank holiday is the essential starting point. However, an exceptional event like an additional bank holiday can become an employer’s elephant trap if it handles the situation poorly.
For example, there may be commercial and reputational considerations that should be borne in mind when deciding on the approach to take:
Employers who are regularly open for business on bank holidays (e.g., in retail and hospitality) might reasonably expect their employees to work any additional bank holidays, as long as their employee’s employment contracts permit it.
Meanwhile, businesses operating in other sectors (e.g. professional services) might suffer avoidable harm to their staff’s morale if they force them to work on a day that most of their peers in the market have off.
Similarly, an employer who has lots of employees may find that some of their employees are contractually entitled to the additional bank holiday, whilst others are not. In such a situation, it may simply be preferable for the employer to offer all employees the additional bank holiday off, rather than risking discontentment or ill-feeling among staff.
Employers should think about the approach they took to previous additional bank holidays, such as for Her Majesty’s Platinum Jubilee or Her Majesty’s funeral in June and September last year. Employees would normally expect the day off if they have been given this previously, and taking a different approach this time would likely not be welcomed by the staff.
Regardless of the approach taken by an employer, it is a good idea to ensure that decisions are taken sufficiently in advance and communicated to employees as openly and as transparently as possible.
For more information on the additional national bank holiday or other employment queries, please click here.
