How To Calculate Holiday Entitlements | Calculating Holiday Pay in Ireland
Annual leave, like minimum rest periods for employees, is covered by the Organisation of Working Time Act, 1997 and is a statutory right of an employee. How do you calculate holiday entitlements in Ireland?
The first thing to note about annual leave is that all employees are entitled to paid holidays/annual leave.
There is no qualification requirement and part time employees are also protected by the Protection of Employees (Part Time) Work act, 2001.
The best way to deal with holidays for part timers is to give them holidays on a pro-rata basis with their full time colleagues.
What is “working time”?
Working time is an important concept for the purpose of calculating holiday entitlements, rest breaks, etc and is defined in section 2 of the Organisation of Working Time Act, 1977 as
|“working time” means any time that the employee is—|
|(a) at his or her place of work or at his or her employer’s disposal, and|
|(b) carrying on or performing the activities or duties of his or her work,|
Time spent on call or standby?
Time spent on call or standby is regarded as working time provided the worker is required to be physically present at a particular place, regardless of the time actually done.
The Organisation of Working Time Act, 1977 does not apply to Gardai or members of the defence forces.
In addition, certain sections of the Act do not apply to regulated employees, employees covered by collective agreements approved by the Labour Court, workers covered by registered employment agreements or employment regulation orders, workers working in exceptional circumstances or an emergency, workers at sea, doctors in training, a person who is employed by a relative in certain circumstances, a person who determines his/her own working time, shift workers and those doing “spread work” (periods of work spread out over the day).
How to Calculate Holiday Entitlements
The relevant section of the Organisation of Working Time Act, 1997 is section 17. It states:
|19.—(1) Subject to the First Schedule (which contains transitional provisions in respect of the leave years 1996 to 1998), an employee shall be entitled to paid annual leave (in this Act referred to as “annual leave”) equal to—|
|(a) 4 working weeks in a leave year in which he or she works at least 1,365 hours (unless it is a leave year in which he or she changes employment),|
|(b) one-third of a working week for each month in the leave year in which he or she works at least 117 hours, or|
|(c) 8 per cent. of the hours he or she works in a leave year (but subject to a maximum of 4 working weeks):|
|Provided that if more than one of the preceding paragraphs is applicable in the case concerned and the period of annual leave of the employee, determined in accordance with each of those paragraphs, is not identical, the annual leave to which the employee shall be entitled shall be equal to whichever of those periods is the greater.|
|(2) A day which would be regarded as a day of annual leave shall, if the employee concerned is ill on that day and furnishes to his or her employer a certificate of a registered medical practitioner in respect of his or her illness, not be regarded, for the purposes of this Act, as a day of annual leave.|
|(3) The annual leave of an employee who works 8 or more months in a leave year shall, subject to the provisions of any employment regulation order, registered employment agreement, collective agreement or any agreement between the employee and his or her employer, include an unbroken period of 2 weeks.|
|(4) Notwithstanding subsection (2) or any other provision of this Act but without prejudice to the employee’s entitlements under subsection (1), the reference in subsection (3) to an unbroken period of 2 weeks includes a reference to such a period that includes one or more public holidays or days on which the employee concerned is ill.|
|(5) An employee shall, for the purposes of subsection (1), be regarded as having worked on a day of annual leave the hours he or she would have worked on that day had it not been a day of annual leave.|
|(6) References in this section to a working week shall be construed as references to the number of days that the employee concerned usually works in a week.|
As you can see there are a number of different methods of calculation. However you must use the one which gives the employee the biggest entitlement.
In summary therefore all employees are entitled to:
- 4 working weeks where at least 1365 hours have been worked in the leave year OR
- One third of a working week where the employee works at least 117 hours in a calendar month OR
- 8% of the hours worked in a leave year (subject to a maximum of 4 working weeks)
Note 1: the maximum entitlement is four of the employee’s normal working weeks and NOT twenty days; this can be significant because the “working week” itself is not defined in the Act and must be construed by reference to the number of days/hours encompassing a work cycle.
Note 2: pay must be paid in advance of the annual leave.
Note 3: periods of sick leave are not counted as hours worked but parental and maternity leave are.
(a) 4 working weeks where the employee works at least 1,365 hours in the year
Sheila works a 39 hour, 5 day week.
She has worked 1400 hours at the end of September. As this exceeds 1,365 hours she is entitled to 4 weeks paid holidays.
Her normal working week is 5 days. She is entitled therefore to 20 days (4 weeks @ 5 days) paid annual leave.
(b) One third of a working week per calendar month in excess of 117 hours
Michael works a four day week at 39 hours per week. This is in excess of 117 hours per month (over 600 hours in fact).
So Michael accumulates annual leave at a rate of 1.34 (one and one third) days per month worked, that is, one third of four days = 1.34.
In a full year (12 months) Michael will accumulate 1.34 * 12 = 16.08 days annual leave.
( c) 8% of the hours worked
Jonathan works for 8 weeks and did 200 hours over the 8 weeks and then quit.
Jonathan is entitled to 8% of hours worked, that is, 16 hours of paid leave which he is entitled to receive when leaving the employment.
NOTE: if more than one of these methods of calculation is applicable, the employer must use the method which gives the greatest entitlement.
How Much Holiday Pay?
If the employee is paid hourly or weekly or monthly, indeed any time based method, then she is entitled to a normal week’s wages before the leave commences and this includes any normal bonus or allowance but excludes overtime.
If the employee is paid a piece rate, the rate of holiday pay is the average weekly pay calculated over the 13 weeks prior to commencing leave.
How to Calculate Holiday Pay
Firstly, if the employee is paid by reference to a salary or a time rate, the amount due for one week of annual leave will be the amount paid to him/her for a normal working week prior to the commencement of holidays.
This payment includes any regular allowance and bonus but does not include overtime.
Secondly, if the employee is not paid by reference to a time rate but by reference to commission or a piece or productivity rate, then his/her holiday pay for one week of annual leave is calculated by reference to the average pay for that employee calculated over the 13 weeks immediately prior to taking leave.
What if the employee gets sick during annual leave?
If the employee provides a sick certificate then his leave should not be counted for the days of his certificate and the employees will be allowed carry over his leave, even where it takes him/her into another leave year.
Timing of leave
The employer can decide when annual leave can be taken.
By the same token it is the employer’s responsibility to see that the employee takes his/her full entitlement within the leave period.
Leave must be given and taken within the leave year unless the employee consents to getting leave in the first six months of the following leave year. Any leave not taken is forfeited unless the employer agrees to the leave being taken within 6 months of the end of the leave year.
An employee has no cause of action for leave untaken in previous years.
The leave year begins on the 1st of April according to the Act but the employer can stipulate a different time period.
How much pay?
Annual leave is paid leave and the obligation is to pay the normal weekly rate of pay.
A statutory instrument, 475/1997 sets out in detail how to calculate payment which will depend on a number of factors and need to account for bonuses (may be included), allowances (may be included), and overtime (not included). (See above)
Losing the job?
The employee is entitled to compensation for any leave that they have not taken in the leave year.
Public holidays in Ireland are set out in the act as follows:
|1. Each of the following days shall, subject to the subsequent provisions of this Schedule, be a public holiday for the purposes of this Act:|
|(a) Christmas Day,|
|(b) St. Stephen’s Day,|
|(c) St. Patrick’s Day,|
|(d) Easter Monday, the first Monday in May, the first Monday in June and the first Monday in August,|
|(e) the last Monday in October,|
|(f) the 1st day of January,|
|(g) any other day or days prescribed for the purposes of this paragraph.|
|2. The Minister may by regulations vary paragraph 1 by substituting for any day referred to in that paragraph another day.|
|3. An employer may, for the purpose of fulfilling any relevant obligation imposed on him or her by this Act, treat as a public holiday, in lieu of a public holiday aforesaid, either—|
|(a) the Church holiday falling in the same year immediately before the public holiday, or|
|(b) the Church holiday falling in the same year immediately after the public holiday or, if the public holiday is a day which is a public holiday by virtue of paragraph 1 (b), the 6th day of January next following,|
|by giving to the employee concerned notice of his or her intention to do so not less than 14 days before the Church holiday (where that holiday is before the public holiday) or before the public holiday (where that holiday is before the Church holiday or, as the case may be, the said 6th day of January).|
|4. Each of the following days shall be a Church holiday for the purposes of paragraph 3:|
|(a) the 6th day of January, except when falling on a Sunday,|
|(b) Ascension Thursday,|
|(c) the Feast of Corpus Christi,|
|(d) the 15th day of August, except when falling on a Sunday,|
|(e) the 1st day of November, except when falling on a Sunday,|
|(f) the 8th day of December, except when falling on a Sunday,|
|(g) any other day or days prescribed for the purposes of this paragraph.|
Public holidays confer public holiday benefits on employees and the employer has a choice of
- A paid day off on that day
- An additional day’s pay
- An additional day of annual leave
- A paid day off within a month of that day.
How much you are entitled to be paid will be roughly similar to the calculation of annual leave pay as set out in SI 475/1997, Organisation of Working Time (Determination of Pay for Holidays) Regulations, 1997.
Public Holiday Benefit Entitlements
Full-time workers have an immediate entitlement to benefit for the public holidays whilst part-time workers have entitlement to benefit when they have worked 40 hours in the previous 5 weeks.
So, when the employee works on the public holiday, they are entitled to their normal pay. But they are also entitled to a public holiday benefit. However this benefit may vary from one public holiday to another, depending on whether they would have been normally due to work or not.
If the business is closed on the public holiday, and the employee would normally have been due to work, they will be entitled to their normal day’s wages.
If the business is open and the employee works, then they are entitled to their normal day’s wages and, in addition, an additional day’s wages or paid time off.
If the business is open, but the employee does not work and normally doesn’t, then they will be entitled to one fifth of their normal weekly wages or a paid day off within a month or an extra day’s annual leave, as the employer decides.
Public Holiday Rate of Pay
For an employee who is normally required to work on the day on which a public holiday falls
If the employee’s pay is calculated by reference to a time rate or salary, he is entitled to a day’s pay according to his normal daily hours prior to the holiday;
If the employee’s pay is calculated by reference to a piece rate or commission, he is entitled to the average daily pay calculated over the 13 weeks prior to the public holiday.
For an employee who is not normally required to work on the day on which the public holiday falls
If the employee’s pay is calculated by reference to a time rate or salary, he is entitled to pay equivalent to one fifth of the normal weekly hours last worked before the holiday;
If the employee’s pay is calculated by reference to a piece rate, he is entitled to one fifth of the average weekly pay calculated over 13 weeks prior to the public holiday.
A claim may be brought in the first instance to a Rights Commissioner (within 6 months of alleged breach, 12 months allowed in exceptional situations) and thereafter appealed to the Labour Court.
Section 27 deals with complaints to the Rights Commissioner and the sanctions which can be imposed which include:
Section 25 of the Act requires employers to maintain employee records of holidays and public holidays for a period of 3 years. Statutory Instrument 473/2001 contains the regulations concerning the records and forms that must be kept.
Terry Gorry & Co. Solicitors has prepared a spreadsheet to record hours worked which is based on these regulations and on the OWT1 form prescribed which you can download by clicking on the link. The requirement to complete our form or form OWT1 is only where the employer has no electronic clocking-in facilities.
Section 27 of the act allows an employee to complain about a breach of a “relevant provision” to a Rights Commissioner. (A relevant provision concerns rest periods and/or holiday entitlements).
A Rights Commissioner (or Labour Court on appeal) can
Holiday and public holiday entitlements can also be claimed at an Employment Appeals Tribunal.
Employers: Calculating Holiday Pay
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