Do employees accrue holiday during their notice period?

Yes, in respect of statutory entitlement to 5.6 weeks' paid annual leave under the Working Time Regulations 1998 (SI 1998/1833). Workers should be paid for any outstanding part of the entitlement on termination of employment. A period during which an employee is working out their notice is a normal period of employment for this purpose. In other words, holiday entitlement for the employee's final part-year of employment should be calculated up to the end of the period of notice that they work.

For the purpose of any contractual holiday pay granted by the employer that is in excess of the 5.6 weeks' holiday required by the Working Time Regulations 1998, payment for any outstanding holiday on termination will depend on the employee's contract of employment and any policy or rule that is incorporated into the contract. In the absence of a policy or rule to the contrary, contractual holiday pay should be calculated in the same way as statutory holiday pay, ie based on the total period of employment through to the end of the employee's notice period.