Holiday entitlement – Paid leave / Annual leave
All workers are legally entitled to 5.6 weeks’ paid holiday per year (known as statutory leave entitlement or annual leave).
The annual leave (reference period and number of leaves) must be specified in the employment contract or at least in a written statement.
Coronavirus (COVID-19) does not affect workers’ entitlement to holiday pay and leave, except for carrying over leave.
The legal minimum
Under the regulations of the 1998 working time (amended on 1 April 2009), each full-time employee receives a minimum of 5.6 weeks of paid vacation, so 28 days.
Bank holidays can be included in the 28 days of paid leave.
The number of paid leave of part-time staff is prorated.
Examples:
A person working three days a week will benefit from 16.8 days in a year.
A person working four days a week will benefit from 22.4 days in a year.
A person working half-time will benefit from 14 days in a year.
The reference period
In the UK, there is no period defined by Law.
It is up to the employer to decide about the period of reference.
It is quite common that British companies choose one of these two following options:
Civil year from January to December.
British financial year: from April Year 1 to March Year 2.
If a leave year isn’t set out in the employment contract, then it will start:
On the 1st day of a new job (if started after 1 October 1998).
On 1st of October (if started on or before 1 October 1998), which is usually the date when rates are amended by the government in the UK.
It is usual that the same period of paid leave is used in the same group of Companies in order to simplify the accruals and consolidation of accounts at year end.
Building up leave
The UK employee is required to have taken his paid leave before the end of the period of reference stipulated in the employment contract or written statement.
Example:
We consider that the leave period runs from April 2021 to March 2022.
An employee starts in July 2021.
He will be entitled to the following paid leave:
(28 / 12) x 9 = 21 days
As per law, the employee will have to use these 21 days between July 2021 and March 2022.
The employment contract says how many days’ leave they can carry over into the next year.
If the employee gets 28 days’ leave, he/she can carry over up to a maximum of 8 days.
If an employee gets more than 28 days’ leave, their employer may allow them to carry over any additional untaken leave.
Please check the employment contract.
The leave year and holiday entitlement are not affected by maternity, paternity, or adoption leave.
The employee still builds up (‘accrues’) holiday over these periods.
Leave affected by coronavirus (COVID-19)
Workers may be able to carry over untaken leave into the next 2 years if they cannot take it because their work is affected by coronavirus.
Consequences on standard payrolls
The paid leave balance is not a compulsory information to show on the UK payroll.
However, if this information is not available on the payroll, the amount of remaining paid leave days available must be regularly disclosed to the employees.
Usually, in standard UK payslips, the annual entitlement is made available, for example 21 days if we refer to our example above.
Some foreign companies which set up branches or subsidiaries in the UK will prefer to use a monthly accrual system of paid leave (like in France for example), which is authorized by law since April 2009.
That means that the employee accrues each month 1/12 of yearly paid leave rights, i.e. 2.33 days per month if we consider a yearly entitlement of 28 days.
In case the employee leaves his/her company, the employer must pay him/her the leave earned and not taken by the date he/she leaves the company.
Applying for leave
The general notice period for taking leave is at least twice as long as the amount of leave a worker wants to take, plus 1 day.
For example, a worker would give 3 days’ notice for 1 day’s leave, unless the contract says something different.
An employer can refuse a leave request or cancel leave but they must give as much notice as the amount of leave requested, plus 1 day.
For example, an employer would give 11 days’ notice if the worker asked for 10 days’ leave.
In practice, companies often put in place a specific procedure for paid leave requests that should be detailed either in the employment contract, or in the company handbook.
The employer can also set unilaterally the period of paid leave to be taken by setting the annual closing of the company during which the employee will be required to take his/her paid leave.
For example, in UK the most preferred annual leave period is between Christmas and the New Year.
Bank holidays
Bank or public holidays do not have to be given as paid leave.
An employer can choose to include bank holidays as part of a worker’s statutory annual leave.
If a bank holiday is on a weekend, a ‘substitute’ weekday becomes a bank holiday, normally the following Monday.
Please find below 2022 UK Bank holidays:
3 January – New Year’s Day (substitute day)
15 April – Good Friday
18 April – Easter Monday
2 May – Early May Bank Holiday
2 June – Spring Bank Holiday
3 June – Platinum Jubilee Bank Holiday
29 August – Summer Bank Holiday
26 December – Boxing Day
27 December – Christmas Day (substitute day)
Source: HMRC and ACAS
