Holidays are an important part of life. Getting away from it all and having fun is vital for our wellbeing and keeps us mentally healthy. But holiday entitlement for both employers and employees can be a touchy subject. And with many laws and regulations governing how it is administered, it is important for businesses to understand its many intricacies.
In this guide, we will look at the topic of holiday entitlement in the UK in greater detail. We will discuss what holiday entitlement actually means and how it affects pay. We will also talk about the legal ramifications of statutory holidays. Let’s get started.
What Is the Standard Holiday Entitlement in the UK?
The annual statutory employee holiday entitlement in the UK is 5.6 weeks. This figure is the same for all employees in the UK regardless of contract type or hours worked. The number of days an employee receives as leave will vary depending on the number of hours they work. Obviously, 5.6 weeks’ of holiday may be less for part-time staff in terms of days when compared to full-time staff.
Is This Set Out in Law?
Yes, it is. Statutory holiday entitlement is set out in legislation in the Working Time Regulations 1998. These regulations state that all workers except those genuinely self-employed have an entitlement to paid annual leave. The rules say that workers have a right to:
- Receive pay for statutory holiday leave.
- Build up (or accrue) holiday entitlement during maternity, paternity, and adoption leave.
- Build up holiday entitlement while absent from work because of sickness.
- Request holiday whilst absent from work because of sickness.
What Does 5.6 Weeks Equate to in Days for a Full-Time Employee?
Generally, 5.6 weeks works out as 28 days of minimum holiday entitlement for a full-time employee who works 5 days a week.
These 28 days usually comprise:
- 20 days of floating leave that can be taken any time of the year. For a full-time employee, this equates to 4 weeks off.
- 8 days for statutory holidays and bank holidays (like Christmas, Easter, etc).
There is no requirement for an employer to enforce the use of holiday entitlement to cover the 8 statutory bank holidays. They can allow employees to use these flexibly if they wish. If this is the case, details of how this works will need to be written into the employee’s contract.
Can An Employer Change Statutory Holiday Entitlement?
UK employees can never proactively change the minimum statutory holiday entitlement. Only the government can adapt the regulations through legislation.
If an employer offers more holidays as part of a contract, they can adapt this as they see fit. They will need the employee’s permission first if a contract amendment is necessary. It’s also important to note that any changes should not drop holiday entitlement below the statutory minimum set out in law.
Do All Employees Have an Entitlement to Paid Holiday?
All employees have a right to receive paid holiday regardless of their contract type. This includes:
- Those on zero-hour or temporary contracts
The way employers work out entitlement in each case may differ. But they must adhere to the statutory guidelines set out by the government.
Does Holiday Entitlement Normally Include Bank Holidays?
Normally, yes. Most businesses will shut down over bank holidays. Some, however, like shops and call centres, may remain open. This can lead to them requiring staff to work on these days. If they do, then the 8 days’ entitlement for bank holidays must be made available for employees to take at other times.
The bank holidays in the UK are:
- New Year’s Day (January 1st)
- Good Friday.
- Easter Monday.
- Early May bank holiday.
- Spring bank holiday.
- Summer Bank Holiday.
- Christmas Day (December 25th)
- Boxing Day (December 26th)
Sometimes a bank holiday, like Christmas, will fall on a weekend. In the event of this, the bank holiday day will move to the next working day.
How Do Employers Calculate Holiday Entitlement in the UK?
This can depend on the type of contract the employee has and the number of days/hours they work.
Fixed Shift Workers
Workers who have regular working hours and a fixed length of working day generally have their holiday calculated in days. This can also apply to shift workers so long as their shifts are the same length. This is the most straightforward calculation.
The law mandates that all employees are entitled to 5.6 weeks’ statutory leave, subject to a cap of 28 days. In reality, this cap will only affect a worker if they work for over 5 days a week.
For example, Fred works 4 days per week, for 8 hours each day. His statutory leave entitlement is the lower of 28 days or 5.6 x 4 days per week by law. As such, he has an entitlement to a minimum of 22.4 days based on the 5.6 x 4 calculation.
Here is an example of somebody who works over 6 days a week: Sarah works 6 days per week. Her statutory leave entitlement is the lower of 28 days or 5.6 x 6 days per week. The 5.6 x 6 calculation comes to 33.6 days. As such, 28 days is lower. Therefore, Sarah’s statutory leave entitlement is 28 days.
Varying Shift Patterns
Where workers work a fixed number of hours per week but not the same number of hours each day, the calculations become complex. Legislation does not state exactly how an employer should incorporate the 28-day statutory cap. Sometimes, the average shift length may be used to work out the number of hours given as leave. In others, the employer may use the total number of hours the employee will work in a year to calculate how many hours leave they should have.
What if I Change My Hours in the Middle of the Year?
With the recent changes in employment rights for family-friendly policies, such as flexible working, more and more businesses are having to be adaptable. This can lead to requests for changes in hours. How this affects holiday entitlement depends on whether you are increasing or decreasing hours.
Where an employee increases their hours, the European Court of Justice mandates employers treat the two periods of work patterns separately. Where an increase occurs during the leave year, an employer should recalculate leave entitlement. Any hours left over from the previous working period be must be carried forward. On top of this, they should add future leave for the new working hours. Where an employee has already taken more holiday than their entitlement during the first period, an employee can deduct this from the second period of entitlement.
Where an employee has reduced their hour’s part way through a holiday year, they have an entitlement to any holiday accrued while working on the increased hours without recalculation. The employer will then need to recalculate further holidays based on the employee’s new working hours.
What Is Holiday Pay?
In simple terms, holiday pay is the money an employee receives when they are away from work on leave.
Do I Get Holiday Pay for Bank Holidays?
If you work for a business that does not operate on a bank holiday, then yes, you will receive pay. If your employer requires you to work a bank holiday, then you will receive standard pay and an extra day’s holiday entitlement to take elsewhere in the year.
How Do Businesses Calculate Holiday Pay?
This can again depend on the contract and the number of hours worked. Normally, when an employee or worker takes a holiday, they should get the same pay as when they work. This is regardless of working pattern.
To work out how much to pay, an employer might base his calculations on:
- The number of days or hours worked each week.
- The number of casual or irregular hours worked.
- The shifts that the employee works.
More often than not, an employer will work out holiday pay differently depending on the type of shift a worker performs.
Fixed hours shifts
If an employee’s working hours do not vary, then an employer will often calculate holiday pay using the standard pay rate. For example, if an employee works 37 hours per week and gets paid £400, then when they take a week’s holiday, they get paid £400.
No fixed hours
If an employee works irregular hours, then employees will often base holiday pay on the average pay received over the previous 52 weeks. If, for whatever reason, an employee did not work in the previous 52 weeks, they will receive no pay at all.
What Is a Holiday Pay Policy?
Every organization should ideally have a holiday pay policy. This policy should not only detail the pay an employee will receive, but also create a proper procedure for holiday pay management.
What Should a Holiday Pay Policy Include?
A holiday pay policy should include the following:
- Details of those eligible and those exempt from holiday pay.
- Any requirements to work on bank holidays.
- The details of pay rates. These should be no less than the employees’ normal rate, but can be higher.
- Details of how casual, flexible, and part-time staff will be paid.
It’s important for any fair and accurate holiday pay policy to be flexible. This will allow changes to be made in the future and for the accommodation of new laws and regulations.
Can an Employer ‘Force’ Me to Take Leave?
Yes, they can. This is generally the case with bank holidays. But there may be other situations where an employer forces an employee to take leave. For example, if an employee has not taken his or her full entitlement and it is getting close to the end of the year.
What is the Minimum Notice for Taking Leave?
This can depend on the employer and their policies. Generally speaking, the notice period for leave is at least twice as long as the amount of holiday taken. For example, 3 days’ holiday would require 6 days’ notice.
Can An Employer Refuse to Let Me Take Leave?
Your employer can refuse to let you take leave if they have a valid reason. They will normally set these out in the company’s holiday policy and the reasons can include:
- Sensitive times of the year. Some businesses can refuse holiday requests at busy times.
- Not enough notice given. Employers can refuse holiday if the request is too close to the leave period.
- Staff shortages. If a business is struggling for staff, they may reject holiday requests.
How Does Overtime Effect Holiday Allowance?
A recent change in the law requires that employers take into consideration regular overtime in holiday pay calculations. Where a worker’s pattern of working includes regular and consistent overtime, then legally the overtime effectively becomes part of their normal hours. This means that any calculations for holiday pay must include the overtime payments too.
By the way, in the meantime, you are searching for a good software to automate holiday entitlement and staff leave planning, feel free to use our free holiday entitlement excel template. Further, you can also use our free online holiday entitlement calculator below –
Can an Employee Earn Extra Leave Instead of Overtime Pay?
Yes. Many businesses prefer to offer what is known as ‘time off in lieu’ instead of pay. This can be beneficial for both parties as it allows workers extra holiday while employers save money.
How Does Leaving a Workplace Affect Holiday Entitlement?
Obviously, if you leave a place of employment, you can no longer take leftover holiday entitlement. But every employee has a right to take all the leave owed to them. In many cases, an employer will roll up leave entitlement into the notice period of the employee. For example, if an employee gives 2 weeks’ notice but has a week’s holiday left, they will work one week while receiving 2 weeks’ pay.
In the event of an employee leaving a business suddenly, for example, because of dismissal, they still have an entitlement to the holidays they have accrued. As they cannot take the days as leave, the employee will often pay them instead.
Holiday entitlement and pay is a complicated subject, but with a little help from this guide, we hope you find it easier to navigate in the future.
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