Fun fact: Did you know that if you are leaving your employment before the Christmas holiday period, you may still be entitled to be paid for the public holidays that fall after your employment has ended?
Employees who are leaving their employment for any reason (e.g. by resignation, retirement, redundancy, dismissal or completion of fixed-term) are sometimes entitled to be paid for public holidays that fall after their employment has ended (i.e. after their termination date). This can happen if the employee has unused annual holidays they are entitled to at the time their employment ends.
To work out whether you are entitled to be paid for public holidays that happen after your employment has ended, follow these steps:
1. Work our whether you are entitled to any leave (this can be different to leave accrued)
- Have you worked for your employer longer than 12 months? If not, then you haven’t become entitled to any annual holidays yet
2. Treat any remaining annual holidays that you are entitled to as if you have taken them immediately after the date your employment ended (this is different to leave that you have accrued).
3. You must be paid for a public holiday if it:
- happens within the time period created by adding on these remaining annual holidays to the end of employment, and
- happens on a day that you would have worked if you were still employed, and the day wasn’t a public holiday.
4. If you are entitled to be paid for a public holiday then:
- the period that the annual holidays covers is extended by one day for each public holiday you are entitled to be paid for, and
- this new extended period may contain more public holidays which also need to be considered for payment.
The payment for any public holidays is calculated in the usual way. You are paid at the rate of relevant daily pay or average daily pay (if applicable) for the day.
Please note, while you may have accrued leave, you do not become entitled to this until the anniversary of your start date.
For example:
Sally started working for her employer on 1 February 2019 and usually works Monday to Friday. Her last day of employment is Friday 11 December 2020. The date Sally becomes entitled to annual holidays is on 1 February 2020 (the anniversary of her start date). She has taken three weeks annual holiday since 1 February and so has one week of annual holiday entitlement left. Her final pay is made up as follows:
- Her pay for the period worked since her previous pay including 11 December 2020
- Payment of her remaining week of annual holiday entitlement
- Payment of the amount of 8% of gross earnings for the period between 1 February 2020 and 11 December 2020 (her gross pay for this period will include the annual holiday entitlement she has been paid out)
If Sally’s last day of work was Friday 18 December 2020 her final pay would be as follows:
- Her pay for the period worked since the previous pay including 11 December 2020
- Payment of her remaining week of annual holiday entitlement
- An additional payment for Christmas Day and Boxing Day (Mondayised). This is because it falls during the one week extension added to the end of Sally’s employment to reflect the annual holidays entitlement owing
- Payment of the amount of 8% of gross earnings for the period since 1 February 2020 (her gross pay for this period will include the annual holiday entitlement she has been paid out)
If you’re not sure whether you’re paying your staff correctly or that you’re being paid out properly over the public holidays, get in touch with one of our employment lawyers.
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