Annual leave and holiday pay

Sue Dennehy Editor's message: The right to paid annual leave is set out in the Working Time Regulations, which derive from EU law. The Regulations came into force in 1998, resulting in an extra 96 million days a year of paid holiday (according to a TUC estimate).

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 rate of 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.

Sue Dennehy, employment law editor

New and updated

Ambulance workers' holiday pay must include "regular and settled" voluntary overtime

Date:

12 July 2018

Type:

Law reports

In Flowers and others v East of England Ambulance Trust, the Employment Appeal Tribunal (EAT) held that voluntary overtime must be included in the calculation of holiday pay for ambulance workers with a pattern of voluntary overtime that is sufficiently regular and settled.
Hot weather

Date:

22 June 2018

Type:

Editor's choice

Is there a maximum temperature beyond which employees 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 to help employers manage employment issues that may arise during hot weather.
UK employees fail to use holiday entitlement

Date:

25 May 2018

Type:

News

Two in five UK employees (40%) took a maximum of just half of their annual leave entitlement during the past holiday year, according to the results of a survey by Glassdoor.
Absence record form

Type:

Policies and documents

Updated to highlight the impact of the General Data Protection Regulation, in force from 25 May 2018, on this document.
Annual leave: Worker entitled to leave accrued over full 13-year period he worked for company

Date:

20 March 2018

Type:

Law reports

In The Sash Window Workshop Ltd and another v King [2018] IRLR 142 ECJ, the ECJ held that the right to paid annual leave of a "worker" who was treated as a self-employed, commission-only salesman could accumulate over an unlimited period, and that the worker was entitled to claim the accrued holiday pay on termination.
KFC staff asked to take holiday during restaurant closures

Date:

22 February 2018

Type:

News

KFC employees have been asked to take annual leave to cover the working time they have lost following chicken supply issues that have affected hundreds of its outlets.
Podcast: Are you at risk of backdated holiday claims?

Date:

9 February 2018

Type:

Audio and video

We discuss the implications for employers of the recent ECJ decision in The Sash Window Workshop and another v King, which opens up the risk of backdated claims for unpaid holiday.
Five things buried in the Good Work plan consultations

Date:

9 February 2018

Type:

Commentary and analysis

When the Government revealed its plans to bolster workers' rights from their first day at work under its Good Work plan earlier this week, details were initially scarce.
Holiday and holiday pay

Type:

Employment law manual

Updated to include a reference to the Merchant Shipping (Maritime Labour Convention) (Hours of Work) Regulations 2018, which consolidate and update the Merchant Shipping (Hours of Work) Regulations 2002.
Consultation on increasing transparency in the labour market

Type:

Consultations

The Government consults on the recommendations in the "Taylor review of modern working practices" for achieving greater transparency and clarity between workers and employers in the labour market.

About this topic

HR and legal information and guidance relating to annual leave and holiday pay.