28 When annual holiday pay may be paid with employee’s pay

(1)

Despite section 27, an employer may regularly pay annual holiday pay with the employee’s pay if—

(a)

the employee—

(i)

is employed in accordance with section 66 of the Employment Relations Act 2000 on a fixed-term agreement to work for less than 12 months; or

(ii)

works for the employer on a basis that is so intermittent or irregular that it is impracticable for the employer to provide the employee with 4 weeks’ annual holidays under section 16; and

(b)

the employee agrees in his or her employment agreement; and

(c)

the annual holiday pay is paid as an identifiable component of the employee’s pay; and

(d)

the annual holiday pay is paid at a rate not less than 8% of the employee’s gross earnings.

(2)

If an employee to whom subsection (1)(a)(i) applies is employed by the same employer beyond 12 months on a series of fixed-term agreements of less than 12 months each, the employer and employee may agree that the employee is to be paid in accordance with subsection (1) regardless of the number of agreements.

(3)

If the fixed-term agreement of an employee to whom subsection (1)(a)(i) applies is followed by permanent employment with the same employer, the employee—

(a)

becomes entitled to paid annual holidays at the end of 12 months’ continuous employment (including the period of that fixed-term agreement) under section 16; but

(b)

the amount of the holiday pay that the employee is entitled to be paid for the holidays is reduced by the amount that the employee has already received under subsection (1).

(4)

If an employer has incorrectly paid annual holiday pay with an employee’s pay in circumstances where subsection (1) does not apply and the employee’s employment has continued for 12 months or more, then, despite those payments, the employee becomes entitled to annual holidays in accordance with section 16 and paid in accordance with this subpart.

Section 28(1)(a)(ii): amended, on 1 April 2007, by section 42.

Section 28(1)(d): amended, on 1 April 2007, by section 42.