Holiday Pay Entitlement

dlcheetham · PayPerShop Newbie Joined: 30 May 2006 Posts: 1

I have a quick question.

Is an employee still entitled to holiday pay if they leave without giving any notice ?

Regards

Ian Congreave · Posted: Mon Jun 05, 2006 7:00 am Post subject: Holiday Pay Entitlement

Two points here.

The statutory paid leave entitlement when an employee leaves, set out in the Working Time Regulations, does not take into consideration the nature of the termination, i.e. resignation or dismissal, or the reasons behind the termination, or whether any contractual obligations, such as giving notice, have been met. So, with regard to the four weeks statutory entitlement, the way in which outstanding leave entitlement is calculated on termination is as required by the Regulations, even if no notice is given.

Otherwise, an employer is entitled to reduce the amount of any additional contractual holiday leave (i.e. entitlement in excess of four weeks) to reflect the damage caused to the business as a result of the immediate departure - but only if the employee's contract allows for that. There are some notes on this at http://www.paypershop.com/faq/deducted5.html.
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Hugo Fair · PayPerShop Regular Joined: 22 Jul 2004 Posts: 73

Just one point - which is more of an HR than a Payroll issue:

If an employee leaves without giving notice AND they still have untaken holiday entitlement, then the first thing you have to decide is when their 'leaving date' is (i.e. the date on which employment ceased).

This is not as obvious as it sounds - but should be covered in the Employment Contract. For instance, if the employee should have given 4 weeks' notice then their leaving date MAY be construed as the date on which they last worked plus 4 weeks. [This doesn't mean you have to pay them for the extra 4 weeks, but has an obvious impact on calculation of any entitlements - such as holiday entitlement].

As Ian says, you can then refer to your Employment Contract to identify whether any 'non-statutory' entitlement (that remains untaken), after pro-rating it at the agreed leaving date, has to be paid or can be withheld.

The reason I mention this is because it has applied in many Employment Tribunals, on issues other than 'leaving without notice' (e.g. dismissals, etc), as the central issue in determining the amount to be paid - rather than simply whether or not anything has to be paid.