How much holiday pay must you pay?
24th July 2009
... Comments

Holidays and accruals

Holiday and holiday pay has been the subject of an extraordinary amount of both legislation and litigation in recent years.  The final incremental increase in statutory holiday came in on 1st April this year and managed to coincide with the ongoing recession.

Minimum holiday entitlement is covered by the Working Time Regulations (“WTR”).    Since 1 April 2009, annual entitlement for a five day a week worker is 28 days (5.6 working weeks) including bank and public holidays.

There is an increasing trend in case law for individuals to be regarded as accruing holiday whilst absent.

Some employers provide for more annual holiday than the statutory minimum.  The “extra” can be made subject to any non-discriminatory rules or conditions the employer wants to impose (provided it’s part of the employment offer), but the ‘statutory’ element  comes with some conditions that cannot be altered.

Part time workers

Part timers now get an allowance (pro rata) for bank holidays as part of their “5.6 working weeks”, even if they wouldn’t be working on that day anyway.

Temps and trainees

 Temporary workers and trainees accrue WTR holiday (unless the trainee is on work experience placement from a college or on a sandwich course).  

School age workers

Children below school leaving age (who have jobs such as paper boys) do not accrue WTR holiday - up to that point their ‘time off’ rights are covered by the Children and Young Persons Act 1933.

Employer’s duty

It is the employer’s job to ensure the worker takes their leave entitlement during the year.  The general rule is that WTR leave must be taken during the holiday year and may not be carried forward (or substituted for by money except when leaving with accruals during a holiday year).

Accruing holiday

Workers continue to accrue WTR holiday when they are absent … on holiday, on sick leave, on maternity leave, for whatever reason … so long as the employment contract is still in place.

Extended sick leave

Recently, the House of Lords (in HMRC v Stringer) has decided that an individual whose employment ended after a substantial period of sick leave was entitled to be paid for accrued but untaken WTR holiday, even if it went back earlier than the start of the holiday year.   This is a dynamic area of employment law, and you should check before calculating the final payment of anyone dismissed during a long term absence.

Sickness on pre-booked leave

Some employers have agreements that provide for sickness to ‘trump’ holiday and for annual leave to be refunded.  Most employers do not.   The default is – that the holiday had been booked and taken, and whether the individual was sick made no difference.  It can surely only be a question of time before someone challenges this, and says they need their full statutory holiday entitlement some other time when they are not ill!

Maternity leave

Individuals on all forms of family absence continue to accrue leave while they are off.

Women on maternity leave must be permitted to take their annual holiday entitlement in a period other than their maternity leave, or to carry it forward into a later year (or payment if they do not return).

Holiday is pay

Accrued statutory holiday is pay and thus cannot be forfeit when an individual is summarily dismissed for gross misconduct.  Additional contractual pay can be treated differently.  

Any non-payment of holiday pay can be claimed via a tribunal as a non payment of wages.

Reducing holidays

Any reduction in contractual holiday can only be made with consent.  Agreements attempting to reduce holiday below the statutory minimum have no effect.  Employees can still insist upon their basic paid holiday.

Annabel Kaye is Managing Director of Irenicon Ltd, a specialist employment law consultancy.   Tel: 08452 303050 Fax: 08452 303060  Website :  You can follow Annabel on twitter –

About the Author


Member since: 23rd January 2012

My passions in life are employment law, argentine tango and gardening; not necessarily in that order.

I love improvising a solution against complex rules and making it look good - whether it is in business...

Popular Categories