UK Annual Leave Myth Busters

Managing employees annual leave is an important part of a line manager’s duties but it can raise a surprising number of issues and questions. For example, the additional bank holiday for the Queen’s Platinum Jubilee left some pondering whether employees have a legal right to the additional day off.

In this blog, our partners at ViewHR look at some queries that are commonly raised and dispel some of the myths around annual leave.

Q: Does a company’s holiday year have to start on 1st January?

The holiday year can start from whenever a business chooses and is often written into the contract of employment. This may be from the date the employee starts, from 1st January or from another date chosen by the company.

Q: If an additional bank holiday is announced, as in the case of the Queen’s Jubilee this year, do we have to give employees an additional day off?

Not unless the contract of employment specifies that any additional bank holidays will be added into annual leave entitlements. If a contract refers to “the eight usual bank holidays” (or similar), or actually lists the eight bank holidays, then the employee will usually not be entitled.

Q: Do employers have to allow employees to take bank holidays off?

Employees do not have a statutory right to have bank holidays off. Full time employees are legally entitled to a minimum of 5.6 weeks off a year, and for many businesses, this is given as 20 days leave + 8 days for bank holidays. However, if an employer needs employees to work on bank holidays, they can give employees 28 days leave and require them to work on bank holidays. The contract of employment should clearly state whether employees will be required to work on bank holidays.

Q: Should employees get additional pay if they work on a bank holiday?

Employees are not entitled to additional payment unless this is specified in their contract of employment.

Q: If an employee has built up a lot of annual leave, can we pay them for the time instead of allowing them to take the time off?

Employees are entitled to take a minimum of 5.6 weeks per year off and should not have the choice to be paid for this time. Annual leave is important for employee’s wellbeing and employees should be encouraged to take their leave. HR systems can help to keep track of who has booked holiday and remind employees to book their annual leave to help reduce build-up of days. Employers may be able to make payment for holiday which is above the statutory minimum of 5.6 weeks, if the contract of employment allows.

Q: Can employees carry over unused annual leave?

Employees have a legal right to take 5.6 weeks of annual leave per year and employers must ensure employees are not stopped from taking this. If there is a workplace agreement in place, an employee may be able to carry over part of their 5.6 weeks of annual leave. If the company offers holidays above the legal minimum of 5.6 weeks, and the contract specifies that some carry over is allowed, employees can carry over holiday above the legal minimum. This should be managed differently if an employee is on sick leave or family leave. These employees will continue to accrue holiday and this leave can be carried over to a future holiday year if it is not taken during the current holiday year. We would suggest getting advice when handling these annual leave calculations as there are some important points to be aware of when managing this.

Q: Do we have to pay accrued annual leave if an employee is dismissed or resigns?

If an employee is dismissed, they must be paid in lieu for any untaken statutory holiday. In some cases, an employer may have a contractual clause that means any holiday above the 5.6 weeks minimum will be forfeited in the case of dismissal but the basic entitlement of 5.6 weeks remains. An employee who resigns should receive payment for accrued holiday. If the contract allows, you may request that employees take any remaining annual leave entitlement during a period of garden leave or while they are serving their notice.

Q: Do employees accrue holidays during their probation period?

Yes, employees do accrue holiday from day one. Some employers will have rules in place meaning that new employees can only take as much annual leave as they have accrued.

Q: What happens if an employee is ill during a period of annual leave, do they still need to use their holiday days for the time off?

Employees can take sick leave and use the holiday days at another time. In these cases, it is important that the company have clear guidelines on how and when employees report this illness to the company.

Q: If an employee is off sick, can they still request annual leave?

Yes, employees can request time off while they are unwell.

Q: Can we force employees to take holiday at a time that the business chooses?

Yes, for most employees. As long as the right amount of notice has been given, employers can require employees, who are not on sick leave or family leave, to take a certain time period off. Some employers do this over the Christmas period or at a point when they know the business will not be as busy. If an employer decides to do this, they have to tell employees at least twice as many days before as the amount of days they need people to take. For example, if they want to close for 10 days, they should tell everyone at least 20 days before.

Q: Do we have to allow employees to have time off whenever they choose?

Employers can refuse to approve leave requests, unless the contract of employment provides otherwise. Employers should have a clear policy on holiday requests (many companies work this on a “first-come, first-served” basis). However, an employee should not be prevented from taking their entitlement across the year, even if they may not be able to have the specific dates that they were hoping for.

Q: Should employees be paid their basic salary during periods of annual leave or do we have to include other payments such as commission/overtime/travel allowances?

Case law has established that pay during the first four weeks of annual leave should include other payments such as commission, overtime pay and call-out allowances.

This blog has been written by ViewHR. The ViewHR team are on hand to support employers with a range of HR matters, including annual leave calculation and administration advice.

If you are an employer and would like support in this area, please contact a member of the ViewHR team today for an initial discussion: hr@viewhr.co.uk | +44(0)1425 205390 | viewhr.co.uk. ViewHR LinkedIn ViewHR are UK based and provide flexible HR support and guidance combined with employment law consultancy.