Holiday Entitlement - Everything you Need to Know

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19 Nov 2018

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The annual employee holiday entitlement in the UK is 5.6 weeks. This figure is the same for all employees hired in the UK.

However, the number of days/hours that this figure translates to can vary depending on the contract. For example, a 5-day worker gets 5 x 5.6 weeks = 28 days, a 4-day worker gets 4 x 5.6 weeks = 22.4 days – but the 5.6 weeks’ figure stays the same throughout.

Holiday entitlement for UK employees may also vary depending on what their contract says about bank holidays and annual leave. As an employer, you have the option to include UK bank holidays as part of your statutory holiday entitlement. But this is not a requirement.

The only circumstance where an individual isn’t entitled to paid annual leave is if they are self-employed. This means those classed as workers get paid for annual leave.

Some employers might try to avoid paying for annual leave by suggesting that a member of staff is self-employed. Employees should check their contract to be certain of their employment status.

Holiday entitlement law

The Working Time Regulations (1998) implements the EU’s Working Time Directive with a few changes. For example, although the EU’s Working Time Directive allows for up to four weeks paid time off, the Working Time Regulations allow for 5.6 weeks of paid time off.

These regulations were in place to ensure the health and mental wellbeing of employees. As part of the initiative, it’s your responsibility to ensure employees take their statutory minimum.

Most employers include bank holidays as part of the annual holiday entitlement, although it’s not a legal requirement to do so.

If you close your business for the bank holiday, you have the option of deducting the bank holiday days from the total statutory holiday allowance for the year. In this situation, you’ll need to inform your staff (usually in the holiday policy of the employment contract) that this rule applies to their holiday entitlement.

How to work out holiday entitlement?

The Croner site now has a holiday entitlement calculator for employers. The calculator accounts for the type of statutory holiday, the number of days or hours worked, and the employment duration (full year or starting/finishing part way).

You should also follow the same process to work out the holiday entitlement for part-time workers.

Calculating holiday pay

The holiday pay entitlement for workers is a week's pay for each week leaves they take. You can calculate a week's pay according to how many hours the employee works and how they’re paid for the hours.

  • Fixed pay for fixed hours (full-time and part-time workers), a week’s holiday pay will be equal to how much they’d normally get for a week’s work.
  • Fixed hours worked over variable shifts (full-time and part-time workers), a week’s holiday pay will be equal to the average number of weekly fixed hours worked in the previous 12 weeks at their average hourly rate.
  • No fixed hours (zero-hour contract), a week’s holiday pay is the average pay they got over the previous 12 weeks.

Giving holiday notice

Although your employees can apply for time off whenever they want, they should give appropriate notice.

The duration might differ, but generally, employees should apply for the time off with up to double the amount of time they’d like to take off. For example, if an employee wants to take two days off work, they should apply four days before the time requested. It’s worth checking your employment contract as companies might enforce their own holiday policies.

During busy periods, you can refuse or change holidays to suit the business. Employees should be sure to refer to their employment contract as holiday and bank holiday rules will be set out by the company.

You must give notice which is at least the same length as the holiday e.g. if the holiday is one week, they have to give notice one week in advance. You can also make employees take their leave at certain times, like Christmas or bank holidays.

Holiday entitlement disputes

A dispute may occur when an employee feels that you aren’t meeting your obligations. For example, if your employee thinks that their right to leave and pay were not met. There are a few ways to handle these types of disputes.

The first step to resolving a dispute is for your employee to bring it up informally with their direct line manager. If you are not able to resolve this issue, the next step would be for them to submit a formal grievance complaint in writing.

The grievance procedure involves receiving the grievance, holding a meeting, investigating the grievance, informing the employee of the outcome and giving the employee the opportunity to appeal. Depending on the company, the procedures might differ, but they must all include a meeting with the employee and an appeal process if needed.

You can refer to the Acas holiday entitlement guideline for more help handling grievances at work.

Expert advice

Contact Croner today for more information on holiday entitlement and employment law: 0808 145 3379.

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