Statutory holiday entitlement: checklist

Sarah-Marie Williams of Clyde & Co concludes a series of articles on statutory holiday entitlement with a checklist to help employers ensure that they meet their obligations in relation to holiday entitlement. Making terms and conditions on annual leave entitlement clear, and ensuring that workers are able to take their full annual leave entitlement, are both ways of helping to ensure compliance with the law.

1. Be aware that statutory minimum holiday entitlement has increased.

The entitlement to statutory paid holiday under the Working Time Regulations 1998 (SI 1998/1833) has increased to 5.6 weeks per year, which is equivalent to 28 days' holiday for a worker doing a five-day week. Previously, the right was to four weeks' leave per year. A two-stage increase was brought about by the Working Time (Amendment) Regulations 2007 (SI 2007/2079). The first increase, to 4.8 weeks' leave, came into effect on 1 October 2007. The second increase, to 5.6 weeks' leave, came into effect on 1 April 2009. Part-time workers are entitled to a pro rated entitlement. The maximum entitlement is to 28 days' leave, regardless of how many days are worked per week. Therefore, a worker who does a six-day week is entitled to only 28 days' paid leave per year.

2. Calculate holiday entitlement for the relevant annual leave year.

It might be assumed that all workers are entitled to 5.6 weeks' leave for 2009. However, unless the current annual leave year runs from 1 April 2009 to 31 March 2010 or later, this is not the case. Where the holiday year started earlier than 1 April 2009 holiday entitlement is calculated according to the proportion of the leave year falling prior to 1 April 2009 (at the previous entitlement of 4.8 weeks' leave), and the proportion of the leave year falling after 1 April 2009 (at the new entitlement of 5.6 weeks' leave).

Many employers have an annual leave year that runs from 1 January to 31 December. For 2009, annual leave entitlement for their employees is the proportion of the leave year prior to 1 April 2009 (ie one quarter) multiplied by 4.8 weeks, plus the proportion of the leave year after 1 April 2009 (ie three-quarters) multiplied by 5.6 weeks.

One quarter of 4.8 weeks is 1.2 weeks. Three quarters of 5.6 weeks is 4.2 weeks. Therefore, the total entitlement is 5.4 weeks' leave. This equates to 27 days for a worker doing a five-day week.

Where entitlement does not amount to an exact number of days, employers can round the entitlement up but not down.

3. Do not assume that workers have a statutory right to time off on bank and public holidays.

The Government increased the annual leave entitlement so that the statutory entitlement now includes the equivalent of the eight bank and public holidays in England and Wales. It might be assumed that, as a result of the increase in leave, the 1998 Regulations give workers the right to paid holiday on bank and public holidays. This assumption is incorrect. There is no automatic or statutory right to take time off on bank and public holidays. Workers can be required to work on bank and public holidays, depending on the terms of their contract, provided that they receive at least 5.6 weeks' holiday. (See Statutory holiday entitlement: bank holidays in this series for more details.)

4. Ensure that contractual terms are clear on holiday entitlement.

Under s.1 of the Employment Rights Act 1996, employers must give new employees a written statement of the terms and conditions of employment. The required terms may be incorporated within a written contract. The statement must include terms relating to holiday and holiday pay. Holiday entitlement must be no less than the statutory minimum, and should be accurately reflected in the written statement. The statement or contract should also make clear whether the holiday entitlement is inclusive or exclusive of bank and public holidays. Whether or not workers are required to work on any of the bank or public holidays, or take these days as part of their leave entitlement, should be stated.

The contracts of existing employees should be checked to ensure that they reflect the increase in entitlement.

5. Ensure that policies and procedures on annual leave are up to date.

Policies on annual leave entitlement should be checked to ensure that they comply with the increased statutory entitlement. Any procedures on requesting and granting annual leave may also need to be amended.

6. Be aware that statutory holiday entitlement applies to all workers.

The right to paid holiday entitlement is not limited to employees and applies also to workers. Individuals who have undertaken to perform work personally for another party that is not a client or customer, such as consultants, agency workers, temporary workers and freelancers, are entitled to the statutory minimum entitlement of 5.6 weeks' leave.

7. Do not pay workers in lieu of statutory holiday (except on termination), or allow them to exchange it for other benefits.

Workers must be given at least the statutory minimum annual leave entitlement. Other than on termination employers may not pay workers in lieu of untaken leave. Nor should workers be able to exchange any of the statutory entitlement for other benefits. If workers' entitlement exceeds the statutory minimum, whether or not they can exchange any amount of the excess holiday for pay or other benefits is dependent on the terms of the contract.

Under transitional arrangements employers were able to make payments in lieu of the initial additional leave (ie the first-stage increase of 0.8 week's leave that took effect on 1 October 2007). However, from 1 April 2009, no payments in lieu of any element of statutory leave may be made, except on termination.

8. Monitor how much holiday workers take.

Employers should have systems in place that monitor how much leave workers take to help ensure that they take the statutory leave to which they are entitled. In the event of a dispute about whether or not an employer has given a worker his or her leave entitlement clear records that show that holiday was taken will help the employer to defend its actions.

9. Ensure that workers are able to take their statutory entitlement.

The Regulations grant workers a minimum entitlement to leave. Although workers are not compelled by the Regulations to take leave, and employers do not have to require workers to take leave, all workers must be able to take their statutory entitlement. Workers can be required to seek the permission of their employer before taking holiday, and a holiday request can be refused if the worker's absence would create difficulties (for example due to particular work demands or because other workers have already booked leave). However, employers should avoid repeatedly refusing leave requests as this could result in workers being unable to take the leave that is due to them. (See also Timing of holiday in the Holiday and holiday pay section of the XpertHR employment law manual for details of the provisions relating to notice for taking holiday and counter-notice for refusing it.)

10. Do not allow workers to carry over leave unless a relevant agreement is in place.

Workers are not entitled to carry statutory annual leave into the following leave year. However, a relevant agreement (which is a legally enforceable agreement between a worker and his or her employer), may provide for 1.6 weeks' annual leave (ie the total increase in leave) to be carried forward for one year only. Workforce and collective agreements come within the meaning of a "relevant agreement", as do terms within a contract or offer letter. Employers that want their workers to be able to carry over 1.6 weeks' of their statutory leave entitlement into the following leave year must ensure that there is a qualifying agreement in place.

Whether or not annual leave that is in excess of the statutory minimum can be carried over into the next leave year is subject to the terms of the contract.

The next topic of the week article will be the first in a series on summer issues and will be published on 9 June.

Sarah-Marie Williams ( is a solicitor at Clyde & Co LLP.

Further information on Clyde & Co LLP can be accessed at