PayPerShop Forum

Hi,

A lady will shortly be going on maternity leave,
is entitled to SMP,
has unused holiday to take,
is unable to take it before she commences her leave,
and by the time she returns a new holiday year will have commenced.

What are the options available to employer? Should they make a payment for unused holiday? Can they refuse to pay, and therefore lady loses her holiday for that year?

Any suggestions welcome!

Dominic, there is no simple way of handling this problem and the issues are not entirely clear in legislation.

First, a person on maternity or adoption leave continues to accrue entitlement to contractual holidays - contractual benefits continue to apply during at least the first six months of leave - and statutory holiday entitlements apply for the remainder of leave.

Our usual suggestions are to take as much leave as possible before starting leave and for the employee to give notice to return early from leave and taking outstanding holidays before actually returning. Don't forget also that any holiday entitlement in excess of four weeks can legitimately be carried forward to the following holiday year.

The vague area is whether holiday pay can be taken during maternity leave. The statutory leave guidance published by BERR says you can't but does not explain why. There does not seem to be any statutory reason why holiday pay cannot be paid during maternity leave. The maternity pay legislation allows any contractual payments made in respect of a maternity pay week to be offset against SMP liabilities, and vice versa. The same for adoption pay. So, I cannot see why a week of holiday pay cannot be paid instead of a week of SMP and the employer still recover the appropriate percentage of the the amount of SMP offset - other than BERR saying you can't.

Can anyone else add anything to this?