Our guide to holiday entitlement

January 11, 2017

The subject of holiday entitlement causes massive confusion for many businesses, often because rules seems to have been written with 9-5, 5 days-a-week workers in mind, rather than today’s complicated business environment.

The law states that all employees are entitled to a minimum of 5.6 weeks holiday per year, which may include Bank Holidays.

A week here means ‘a working week’ eg someone working 5 days a week is entitled to 5 x 5.6 = 28 days.

Statutory leave is limited to 28 days, so someone working six days a week is still only entitled to 28 days, not 33.6 (6 x 5.6).

In this scenario, it is generally assumed that the 28 days will consist of 20 days ‘annual leave’ + the eight statutory Bank Holidays (BH), but it doesn’t have to. There is no legal ‘right’ to have BHs off, or to be paid extra for working on them.

There is a great deal of confusion about handling BHs for part-time staff, and it’s not set down in law how you have to do it.

If someone works 3 days a week, their entitlement would be 3 x 5.6 = 16.8 days, usually rounded up to 17 days (you may round up, but not down).

In the above example, if someone works Monday, Tuesday and Wednesday, then there will be at least four BHs falling on their working days, possibly more depending on when Christmas falls. It is perfectly reasonable for you to deduct all the BHs that fall on their working days from their total, leaving them to take the rest when they choose.

If someone works Tuesday, Wednesday and Thursday, there may be very few, or even no BHs that fall on their normal working days. Once again, you should deduct any that do fall on a normal working day, with the rest available as normal leave days.

Bear in mind that how much remains will vary from year to year, depending on when Christmas and New Year fall.

If an employee works very irregular hours, or is on a zero hours contract, they are still entitled to paid holiday. It is usually simplest to calculate accrued holiday as the hours are worked. The statutory minimum leave entitlement of 5.6 weeks is equivalent to 12.07% of hours worked. So, if an employee has worked 15 hours in a months, they will accrue 15 x 12.07% = 1.81 hours (or 109 minutes).

It is not possible to pay someone in lieu of their minimum holiday entitlement.

Please note – this information is provided for guidance only, and is not a substitute for specific legal advice in any given situation.

Eight Legal Ltd. Premier Service provides Contracts, Employee Handbook, and comprehensive policies and template letters, along with unlimited email and telephone advice. The advice is practical and business-focused, to keep your business running smoothly. For more information contact us on 01242 570161, email [email protected].