All UK workers are entitled to at least 5.6 weeks’ holiday per year, inclusive of bank holidays. For full-time staff on a five-day week this means 28 working days and pro-rata for part-time staff. Staff working more than five days a week still only get 28 working days.
This entitlement applies not only to employees but also to other staff who provide services personally to you, unless they are in business on their own account. This means certain consultants or contractors must be given paid holiday.
There is no legal requirement for staff to have time off on bank or public holidays or to receive extra pay for working those days, although many employers offer this. For example, if a place of work is closed on bank holidays, the employer can make staff take these days as part of their annual leave entitlement. By doing so, the employee has no choice about taking holiday on the bank holiday and can only choose when to take the remaining days. Record clearly in the employment contract what your workplace arrangements are for bank holidays.
Employers can require workers to take their holiday on a certain date by giving twice as much notice as the amount of holiday required (eg two weeks’ notice of one week’s holiday), unless something different is stated in the contract. Except on termination, employers cannot 'buy out' the right to holidays.
When workers leave, you must pay them for accrued but untaken holidays in respect of the statutory minimum holiday requirement. For any holiday above statutory minimum and for how you calculate the pay due for unused holiday, you can set your own rules in the contract.