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

Cases on appeal

Type:

Law reports

Updated to reflect that the Court of Appeal will hear the appeals in Ali v Capita Customer Management Ltd and Hextall v Chief Constable of Leicestershire Police on 1 May 2019.
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).
Bank and public holidays 2020 (Scotland)

Type:

Quick reference

XpertHR Quick Reference - statutory bank holidays 2020 (Scotland).
More than a million employees not taking holiday at risk of burnout

Date:

27 July 2018

Type:

News

One in 12 workers are not receiving their full holiday entitlement, according to the TUC.
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.
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.

About this topic

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