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

Holiday and holiday pay

Type:

Employment law manual

Restructured and revised to provide a more accessible overview for employers and HR professionals.
Employment law manual: Holiday and holiday pay section restructured

Date:

22 February 2019

Type:

Editor's choice

We have restructured and revised our Holiday and holiday pay section of the Employment law manual, to provide a more accessible overview for employers and HR professionals.
Cases on appeal

Type:

Law reports

Updated to reflect that the Supreme Court has granted Ms Tomlinson-Blake, supported by Unison, leave to appeal the Court of Appeal's decision in Royal Mencap Society v Tomlinson-Blake.
Podcast: Key employment cases for 2019

Date:

11 January 2019

Type:

Audio and video

Which employment cases will have the biggest impact on HR in 2019? We assess the likely impact on employers of upcoming cases on: the national minimum wage, shared parental leave, holiday pay, restrictive covenants, collective bargaining, covert CCTV, and employment status.
Increase in holiday reference period from 12 weeks to 52 weeks

Type:

Legal timetable

The reference period used for determining a week's pay when calculating holiday pay for workers with irregular hours increases from 12 weeks to 52 weeks.
Annual leave: German law cannot automatically preclude termination payment for unused holiday

Date:

7 November 2018

Type:

Law reports

In Kreuziger v Land Berlin and Max-Planck-Gesellschaft zur Förderung der Wissenschaften eV v Shimizu, the European Court of Justice (ECJ) held that a worker who does not apply for leave does not automatically lose the right to a payment in lieu on termination of employment.
Annual leave: Worker's right to payment for untaken holiday survives death

Date:

7 November 2018

Type:

Law reports

In Stadt Wuppertal v Bauer; Volker Willmeroth als Inhaber der TWI Technische Wartung und Instandsetzung Volker Willmeroth eK v Broßonn, the European Court of Justice (ECJ) held that a German law that prevents a payment in lieu of a deceased worker's outstanding annual leave from forming part of his or her estate is incompatible with EU law.
Annual leave: Time to put a stop to 'rest-shaming'

Date:

1 November 2018

Type:

Commentary and analysis

As many employers wind up their holiday allowances for the year, what message do you give out on taking leave? Jonathan Richards, CEO of breatheHR, believes it pays to be positive about taking holiday.
Bank and public holidays 2020 (England and Wales)

Type:

Quick reference

XpertHR Quick Reference - statutory bank holidays 2020 (England and Wales).
Bank and public holidays 2020 (Northern Ireland)

Type:

Quick reference

XpertHR Quick Reference - statutory bank holidays 2020 (Northern Ireland).

About this topic

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