Employee holidays

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. 

As well as the basic information about the amount of holiday provided to your employees, consider including:

• the minimum notice that staff must give to take holiday

• the maximum holiday that can be taken at one time

• a requirement that staff use up their holiday in their notice period

• the right to make a deduction from pay on termination of employment if holiday has been taken in excess of the accrued amount

• how payment in lieu of unused holiday will be calculated

• what the rules are about carrying unused holiday forward from one year to the next

Rolled-up holiday pay (ie where payment for holidays is included in the regular payment of wages rather than paid at the time holiday is taken) is no longer permitted. Payment must be made at the time that holiday is taken.

Accrual of holiday during sick leave is a highly complex issue. 

It is clear that holiday continues to accrue while employees are on sick leave and if employees have not been able to use their entitlement due to sickness, they must be permitted to carry forward accrued holiday to the subsequent year (at least in respect of four weeks’ leave).

However it is not clear when that carried-forward leave expires or if there is any limit on the amount that can accrue.  

Holiday also continues to accrue while an employee is on maternity leave or similar and must be permitted to be carried forward if it cannot be used during the leave year.

When employees who are on holiday become sick, the sick days cannot be counted as holiday so must be added back to their unused holiday entitlement, to be taken at a later date.

In England and Wales, there are currently 8 bank holidays, while in Scotland there are 9. While in England Wales bank holidays tend to be automatic public holidays (the majority of workers are given the day off and the day is generally observed as a holiday) this is not the case in Scotland. In Scotland, there is much less uniformity regarding which bank and local holidays are granted as paid leave to employees. As a result, Scottish employment contracts will usually provide a holiday entitlement of a mixture of bank and local holidays. Not everyone is entitled to paid leave on bank or public holidays.