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Introduction to this document

Holidays policy

Workers have a statutory right to a minimum of 5.6 weeks’ (28 days’) paid leave per annum. Whilst you’d think granting holidays and holiday pay is a relatively straightforward exercise, disputes over holiday pay are one of the most common claims brought before an employment tribunal. Having a holidays policy statement will help you to clarify your holiday rules.

Holiday pay provisions

Our Holidays Policy statement covers everything from clarifying what the holiday year is to confirming that there’s no right to carry over holidays from one holiday year to the next, to setting out a system for booking annual leave, to determining holiday pay in the first and last year of employment, to clawing back excess holiday taken over accrued entitlement on termination of employment, to dealing with the accrual and taking of annual leave during long-term sickness absence and much more. It’s important to set your own contractual rules on all of these issues. Whilst the Working Time Regulations 1998 set out statutory minimum provisions on holiday pay, you can be more generous and, in some instances, for example on the amount of notice required to take annual leave, more restrictive. In addition, the Regulations don’t cover everything. For example, they don’t set a maximum on how many days can be taken at any one time. Also, if you grant more holidays than the statutory minimum entitlement - for example, five weeks plus bank holidays - the Regulations don’t apply at all to the contractual holiday that you grant in excess of the statutory 5.6-week minimum. With holiday pay disputes turning into one of the top five types of employment tribunal claim, it’s important that your policy statement is as clear and comprehensive as possible.

Note that a separate, bespoke annual leave scheme applies under the Working Time Regulations 1998 to irregular hours and part-year workers for holiday years beginning on or after 1 April 2024. This scheme isn’t covered in our policy.