Holiday Entitlement

Holiday entitlement and pay can be somewhat confusing. Particularly for employees who change jobs mid-way through the year or work less than a full 40 hour work week.

What is holiday pay and why are employees entitled to it?

First, let’s cover full time employees. Employees working full time hours are entitled to 28 days leave per calendar year.

Often, this is explained as “20 days + 8 bank holidays”. The reason many companies split holiday entitlement this way is due to individual company close downs. The majority of companies, both large and small, close their businesses on bank holidays. Employers use holiday pay entitlement to cover the cost of paying employees for bank holidays.

What if the Company does not close on bank holidays?

The exception, of course, are retail, health care, hospitality, and the like. Those companies normally work bank holidays. Companies and organisations that require employees to work bank holidays must ensure all full time employees receive 28 days leave each year.

Q: Can an employer dictate when employees can take their holiday?

A: Yes, employers can dictate each day of an employee’s annual leave. For example, an employer could request all their employees to take the 30th of each month as part of their holiday entitlement.

Holiday Pay Entitlement for Part Time Workers

There is a lot of confusion surrounding holiday pay entitlement for part time employees since holiday entitlement is calculated on a pro rata basis. An example of this would be a part time employee who works 3 days per week.

Part time Holiday Pay Entitlement

Calculate Holiday Pay for Part Time Workers

A part time employee working 3 days per week works 60% of the time of an employee working a 5 day week.
(⅗ = 0.6 = 60%)

Based on 28 holidays for full time employees the part time employee would be entitled 60% of that entitlement, or 16.8 holidays per calendar year.
(28 days x 0.6 = 16.8 days)

What impact will Brexit have on holiday entitlement?

EU law is the source of many UK employment rights. However, the United Kingdom already have legislation in place that gives UK employees a more generous minimum holiday entitlement than required by EU law (EU law states that employees are entitled to 20 days annual leave).

However, Court of Justice of the European Union (CJEU) rulings relating to the operation of annual leave have proved both unpopular and confusing with UK businesses. An example is the right to accrue holiday entitlement during long-term sick leave.

Current legislation (from CJEU) allows employees to accrue holiday time whilst on sick leave. Many employers already struggle when an employee is on long-term sick. It is an additional disadvantage when employees continue to accrue holiday entitlement.

It is predicted employees on long-term sick will no longer accrue annual leave after the UK exit from the European Union.

Government Holiday Pay Calculator

GOV.UK offers a calculator where you can calculate holiday entitlement. It works for full-year and full-time as well as part-year and part-time employees. Give it a try at Holiday Entitlement Calculator.

Should you have any questions feel free to reach out to our help line. DLP advisors are available to answer any questions you may have at 0330 400 4495.