Paid annual leave

Fiona CumingEditor's message: The right to paid annual leave comes from the Working Time Regulations, which derive from EU law. They came into force in 1998 and gave workers the legal right to a minimum period of paid holiday each year. The TUC estimates that workers gained an extra 96 million days a year of paid holiday as a result.

The four weeks’ minimum leave under EU law was boosted by the introduction of a further period of 1.6 weeks' domestic annual leave in 2007 – meaning that workers are currently entitled to at least 5.6 weeks’ holiday a year (which can include bank and public holidays), paid at their normal pay.

In recent years, a number of European Court of Justice (ECJ) decisions in relation to the operation of paid annual leave have muddied the waters for employers. Not only has the ECJ ruled that paid annual leave continues to accrue during sick leave, and can be carried over if not taken in the relevant leave year, but it has also decided that the calculation of holiday pay should be based not just on basic pay but on various other payments such as overtime and commission. However, this has left a number of important questions, including exactly how this should be worked out in practice.

In 2011, the then Government consulted about revising the Working Time Regulations to comply with ECJ decisions on the interaction between annual leave and sick leave, but no action was subsequently taken. Brexit may now provide an opportunity for the current Government to examine as a whole, and clarify for employers, the important area of workers' right to paid annual leave.

Fiona Cuming, employment law editor

New and updated

  • Hot weather

    Date:
    20 June 2017
    Type:
    Editor's choice

    Is there a maximum temperature beyond which staff are not expected to work? Should employers relax their dress codes when temperatures are high? Can employees request annual leave at short notice? XpertHR has a range of resources on employment issues that arise during hot weather.

  • Annual leave: Advocate General suggests that workers can carry over holiday entitlement until paid holiday offered

    Date:
    8 June 2017
    Type:
    Law reports

    The Advocate General has taken the view that where an employer has not provided a worker with paid leave, the worker's right to paid leave carries over until he or she has the opportunity to exercise it and, on termination of the engagement, the worker has the right to payment in lieu of any leave that is outstanding.

  • Holiday and holiday pay

    Type:
    Employment law manual

    Updated to include information on the Advocate General's opinion in The Sash Window Workshop Ltd and another v King, which considered whether or not a worker is entitled to receive pay in respect of accrued holiday not taken in previous years.

  • Cases on appeal

    Date:
    1 June 2017
    Type:
    Law reports

    Cases on appeal provides news on key case law developments that are expected.

  • Ambulance workers' holiday pay should include overtime for "shift overruns"

    Date:
    30 May 2017
    Type:
    Law reports

    An employment tribunal has held that ambulance workers' non-guaranteed overtime in respect of "shift overruns" should be included in the calculation of their holiday pay, but that on the facts of this case purely voluntary overtime does not have to be included.

  • Holiday pay: EAT confirms limit on unlawful deductions claims

    Date:
    17 May 2017
    Type:
    Law reports

    The Employment Appeal Tribunal (EAT) has refused to interfere with the earlier EAT decision limiting the potential for claims for historical non-payment of holiday pay.

  • Zero hours workers assume no entitlement to paid holiday

    Date:
    9 May 2017
    Type:
    News

    Half of people on zero hours contracts wrongly believe that they are not entitled to paid holidays, research by Citizens Advice has revealed.

  • Podcast: How holiday cases are affecting employer practice

    Date:
    5 May 2017
    Type:
    Audio and video

    In this week's podcast, we discuss the key findings of our new research on employers' annual leave offerings and explain how employers are working out holiday pay in the light of the glut of case law in recent years.

  • Annual leave survey 2017

    Date:
    5 May 2017
    Type:
    Survey analysis

    XpertHR research looks at annual leave provision, how employers calculate holiday pay, and arrangements for unused holiday entitlement.

  • ECJ considers holiday carry-over beyond sick leave

    Date:
    30 March 2017
    Type:
    News

    A worker's annual leave can be carried over into the following holiday year if sickness absence prevents holiday from being taken. But what if a worker is prevented from taking leave for other reasons beyond their control?