NOTE: You are viewing documentation for a previous tax year version of BrightPay. Click here to view the documentation for the current 2021/22 tax year version.
Holiday Entitlements - Useful Information
Employees' holiday rights start on the first day of their employment. Employees do not have to wait before they build up holiday rights.
Employees are entitled to a minimum of 5.6 weeks paid annual leave - equating to 28 days for an employee working five days a week. Part-time employees are entitled to the same level of holiday pro-rata (5.6 times the employee's normal working week e.g. 22.4 days for an employee working a four day week).
Employees do not have an automatic right to paid leave on bank and public holidays, though many people receive the day off work. Any right to time off or extra pay for working on a bank holiday depends on the terms stated in the employee's contract of employment.
Holiday pay must be the employee's normal rate of pay. In line with recent court rulings there must be no financial disincentive for an employee taking annual leave.
If the employment contract stipulates that an employee must work a set amount of overtime each week then this is included in pay calculations. Regularly worked overtime, although not necessarily included in the contract of employment, should also be included. Irregular overtime should not be included.
There are different rules for calculating holiday pay depending on the working patterns involved:
(a) For workers with fixed working hours - If a worker's working hours do not vary, holiday pay would be a week's normal remuneration. (b) For workers with no normal working hours - If a worker has no normal working hours then their holiday pay would still be a week's normal remuneration but the week's pay is usually calculated by working out the average pay received over the previous 12 weeks in which they were paid, or any other timeframe that fairly reflects their normal pay. (c) For shift workers - If a worker works shifts then a week's holiday pay is usually calculated by working out the average number of hours worked in the previous 12 weeks at their average hourly rate, or any other timeframe that fairly reflects their normal pay.
Employers can control when employees take their leave or can rule out holidays during certain times of the year (unless a contract of employment states otherwise.)
Unless the employment contract states otherwise, employees should give their employer notice of their intention to take leave. This should be at least twice as long as the holiday that they want to take. For example, an employee should give at least two weeks’ notice for a one-week holiday.
Employers must answer leave requests at least as far in advance as the length of leave requested. For example, they must answer a request for one week’s leave at least one week before the leave is due to start.
Should an employee leave employment during the holiday year, their employer must settle up on the employee's holiday entitlements. An employee has the right to be paid for any untaken statutory holiday entitlement that they have accrued.
As a result of cases brought by trade unions, it is no longer legal for an employer to ‘roll up’ holiday pay by paying a little bit extra throughout the year. Holiday pay must be paid when the holiday is actually taken.
A worker's entitlement to holiday pay will continue to accrue during sick leave (both paid and unpaid). If a worker is unable to take their annual leave in their current leave year because of sickness, they should be allowed to carry that annual leave over. Any leave carried over in this manner must be used within an 18 month period after the end of the leave year in which the leave accrued. Alternatively, they may choose to specify a period where they are sick but still wish to be paid annual leave at their usual annual leave rate.
If you are on statutory maternity or paternity leave you are still entitled to paid annual leave as well.
Details of an employee's annual leave entitlements must be included in their contract of employment, or written statement of terms of employment. Note: This statement is required by law and must be given to employees within two months of starting employment.
Employers are well advised to have a clear annual leave policy in the handbook and contract of employment in order to clarify the manner in which annual leave may be taking, ultimately avoiding confusion and conflict in this matter. Further information can be found here.