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Moves To Close ‘Bank Holiday Loophole’

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Employers who force workers to count bank holidays as part of their 20 days’ statutory paid leave could find their hands tied if government plans to close the loophole get the go-ahead.

The DTI has launched a consultation on whether to increase the statutory 20 days’ paid leave to 28 days. Although employers would not be forced to give staff time off on bank holidays, they would have to grant leave on alternative dates.

As the extra eight days do not fall under the European Working Time Directive, it would be possible for employees to carry over holiday to the following year or to receive a cash payment. The DTI is currently carrying out an assessment to determine the cost of the proposals to industry.

Publishing the consultation Employment Relations Minister Jim Fitzpatrick said: “The Government intends to honour its commitment and make sure that workers have the right to take paid bank holiday leave and not have to use them as part of their twenty day holiday entitlement.

“Paid holiday leave is essential to allow people work-life balance and a way to take time out for themselves. Many good businesses already offer more paid holiday than the statutory four weeks, recognising that it can help keep staff motivated and loyal to the company.

“I hope that businesses, unions and individuals will take part in this consultation and give us their views so that we can work together to introduce this new right without placing unnecessary burdens on business.”

TUC general secretary Brendan Barber said: “The TUC looks forward to responding in detail to the consultation to ensure that all UK workers, especially the low-paid, get the chance as soon as possible to spend a decent amount of time away from work and with their families and friends.”

The Government proposes to phase in the additional leave starting with an increase from 20 to 24 days (pro rata for part time workers) from October 1, 2007. In addition views are being sought on whether the rest of the leave should be introduced:

  • In one stage, from October 2008
  • I n one stage, from October 2009
  • I n two phases, increasing to 26 days in October 2008 and 28 days from October 2009.

CBI’s deputy director-general John Cridland said: “Companies want their staff to enjoy adequate paid holiday, but the job still needs to get done. This move will impose a substantial cost on some businesses, so it is important that the increase is phased in over time so that employers are able to adapt to the change.”

He added: “It is right that a proper impact assessment is carried out. The cost to business when statutory holiday entitlement was increased from three to four weeks in 1999 was £2.3 billion.

“The eight extra days should be phased in gradually, starting no earlier than 2007, so that businesses can absorb the extra cost.”

The consultation, which closes on September 22, can be found at: Government consultations

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