Given the additional cost to employers in granting an extra day’s holiday, those businesses already weathering the storm of the current economic climate may not find this news particularly welcome.

On the other hand, a large number of businesses will stand to benefit from the increased spending that will inevitably result from the royal wedding and an extra bank holiday.

In both cases, employers may need their staff to work on the bank holiday and will want to ascertain whether or not they can require their staff to do so.

Do employers need to give their employees an additional day of paid holiday? 

A full-time worker in the United Kingdom is currently entitled to a statutory minimum holiday entitlement of 5.6 weeks (28 days) paid holiday per year under the Working Time Regulations 1998 (the "Regulations"). Importantly, there is no additional statutory right for a worker to take or be paid in lieu of the eight bank and public holidays currently observed in England and Wales. Subject to providing a worker with this minimum entitlement, a worker’s entitlement to the extra bank holiday will depend on the terms of their contract.

A worker whose contract entitles them to a certain number of days’ holiday plus bank and public holidays would be entitled to take the additional bank holiday on 29 April 2011 unless their contract refers to holiday being plus “the usual” statutory and bank holidays or plus the eight statutory and bank holidays.

A worker whose contract entitles them to a number of days’ holiday inclusive of bank and public holidays would also be entitled to take the additional bank holiday albeit their overall holiday entitlement for that holiday year would remain at the same number of days. Compare this with a worker whose contract provides for a number of days’ holiday with no reference to an additional entitlement to bank and public holidays.

Such a worker would not be contractually entitled to take the 29 April as a bank holiday.

Regarding part-time employees, generally speaking, they have a right not to be treated less favourably than their full-time colleagues on the ground of their part-time status, if that treatment cannot be objectively justified.

A straightforward way of dealing with this issue is to make sure that part-time employees are entitled to a pro-rata holiday entitlement equivalent to that of their full-time colleagues. This means that where full-time employees are entitled to the additional bank holiday their part-time colleagues should be entitled to such additional holiday calculated on a pro-rata basis.

For employees who do not work on Friday they would need to be allowed to take their extra holiday entitlement on a day when they would usually be working.

Otherwise an employer is faced with the prospect of having to show that the less favourable treatment is not because of the part-time worker’s status and/or that the treatment is nonetheless justified.

Case law suggests that this argument may be more likely to succeed for businesses which operate for seven days a week and where both full-time and part-time employees work a variety of patterns that may or may not include bank holidays.

For those employees who are on sick leave, if they are contractually entitled to bank and public holidays then their contract will help to determine whether they accrue holiday whilst on sick leave. If the contract limits the accrual of holiday during sick leave to their statutory minimum entitlement (see above), then they would not be entitled to accrue the additional day. In the absence of such a provision, however, they would accrue the additional day.

Regarding employees on maternity leave, it is not possible to take holiday whilst on maternity leave. However if that employee is contractually entitled to the extra day of holiday (see above), then they will accrue this day of holiday.

It is worth mentioning that if an employer grants the extra day of holiday irrespective of whether its employees are contractually entitled to that additional day, then it should ensure that employees on maternity leave or on sick leave because of an underlying disability, are not discriminated against. Such employees should be allowed to accrue the day of holiday to avoid the risk of discrimination claims.

• This issue is not unique to the year 2011. An additional bank holiday has also been designated on 5 June 2012 to celebrate the Queen’s Diamond Jubilee.
• Proceed with care if your staff are employed on different types of contract. For example, putting aside any possible discrimination risks, it is likely to seriously damage moral if you allow some employees to have an additional bank holiday (because this is permitted by their contract) but not others (whose contract does not permit the additional day).
• The weekend before the wedding day is the Easter weekend and therefore be prepared to receive an influx of holiday requests for the three days (ie 26 April 2011 to 28 April 2011) in between the two four day weekends. If you do not already have one, consider putting in place a procedure to help you to consider such requests fairly.
• As winter has already arrived with a vengeance and staff are already looking forward to warmer days, do not delay in deciding your response to the extra day and communicate to staff promptly.

Victoria Lamont is a solicitor in the employment team at law firm Speechly Bircham LLP. Victoria can be contacted on: +44 (0)20 7427 6621 or by email: victoria.lamont@speechlys.com

Adam Partington is a solicitor in the employment team at law firm Speechly Bircham LLP. Adam can be contacted on: +44 (0)20 7427 6777 or by email: adam.partington@speechlys.com