Pay in lieu of holidays

Under the Working Time Regulations workers cannot agree to be paid in lieu of taking their minimum holiday entitlement (four weeks in the year for a full-time worker) except where their contract is ended and they have not yet taken all the leave due to them.

The right to pay in lieu of holidays when employment ends is absolute. The EAT has held that a clause in the employee's contract which deprived the employee of the right to pay in lieu of holidays where he was dismissed for misconduct was null and void.

There are no circumstances when pay in lieu will not be due. Representatives need to examine their disciplinary procedures. If they also provide for the right not to pay for holidays in lieu where the employee is dismissed they should use this ruling to have the requirement removed.

Witley & District Men's Club v MacKay 151/00