Holiday Pay and the Welfare Credit Scheme

The Recognised Holiday Year

The holiday year shall commence on the first working Monday in January and will conclude on the Sunday preceding the first working Monday in January of the succeeding year.

Entitlement to Annual Holidays

With effect from Monday, 6 January 2020 an Operative with one full year of service shall be entitled to 24 days annual holiday and eight days public holiday, total 32 days.

Annual Holiday Pay Calculation

Payment for any period of annual or Public Holiday is calculated by reference to an Operative’s normal week’s pay as defined in Sections 221 to 224 of the Employment Rights Act 1996. When calculating holiday pay entitlement certain additional elements, as appropriate, should be included within the calculation. These may include some or all of the payments set out below:

(a) Normal earnings shall include, where appropriate:

  • Basic rate of pay (37.5 hours) or whatever is stated in the Operative’s Written Statement of Employment Particulars
  • Responsibility money
  • Regular bonus payments
  • Shift Premium
  • Guaranteed overtime (contractual)
  • Normal non-guaranteed overtime
  • Voluntary overtime when worked regularly and consistently
  • Work-related travel payments
  • Commission
  • London Weighting

(b) Currently, normal earnings do not include:

  • Ad hoc voluntary overtime
  • Ad hoc bonus payments
  • Lodging allowance

Operatives must be paid the equivalent of an average of their weekly normal earnings paid over the last 52 weeks (regardless of shift pattern) for at least the first 20 days of their holiday (pro-rata). The remaining 12 days need only be paid at the Operative’s basic rate.

The amount of holiday pay per week is calculated as follows:

Illustration showing that the amount of holiday pay per week is equal to total eligible earnings in the last 52 weeks*, divided by 52

* For detailed information on what comprises “the last 52 weeks” employers are advised to refer to Sections 221-224 of the Employment Rights Act and ACAS Guidance on Holiday and Holiday Pay.

An Operative who commences employment part way through the year shall receive pro rata annual leave, in accordance with the following formula:

Illustration, annual leave entitlement is equal to annual holiday entitlement divided by 52, multiplied by weeks of work left his holiday year

Holiday with Pay Scheme

The Holiday With Pay Scheme is a fully flexible scheme designed to act as a savings scheme to enable members to put money aside for their employees full holiday entitlement, payments can also include top up and some office staff can be included meaning more savings can be made.

Money can be paid into the scheme whenever it suits the employer and also withdrawn as and when it is needed for employees taking different weeks/days throughout the year. 

A welfare credit is paid for separately to holiday pay and gives various benefits including sick pay, death benefit and BUPA cover as the Table of Benefits shows.

The current Guidance on the Holiday with Pay Scheme can be found here.

Holiday Credits Scheme

The holiday credit scheme covers 27 days out of the 32 days entitlement for all operatives that money is paid in for.

There are 3 public holidays that are not covered by the credits and the company are responsible for paying for these – Spring, May Day and one day of the autumn holidays. The additional 2 days would also be paid by the employer.

The SJIB have the following 3 payouts periods each year:

  • March for the 5 days at Easter
  • June for the 12 days in Summer
  • December for the 10 days at Christmas

By purchasing holiday credits entitles both operatives and staff members to various benefits such as sick pay, death in service benefit and BUPA. See the Table of Benefits

All holiday credits are based on the shop rate so anyone on a higher rate would be due top up on their holiday pay to their normal earnings for the full 31 days of holiday.

This chart shows the current dates the holiday credits are collected for the relevant holiday period. Download the current Holiday Welfare Credit Scheme Chart.

For more information on any of our holiday schemes email or or call on 0131 445 9213

Holiday Welfare Credit Scheme chart

Download the Holiday Welfare Credit Scheme charts which show the payment week numbers, with weeks commencing on Mondays and the Credit and Holiday value figures for each grade in 2020-2021.