Increase in holidays

On 1 April 2009 statutory annual leave entitlement increases from 4.8 to 5.6 weeks (28 days for those employees working a five day week). Employees working part-time are entitled to the same level of holiday pro rata. Bank and public holidays can be included in the holiday entitlement.

An additional change relates to payment in lieu of untaken holiday. Currently, employers may offer the option to pay an employee for some holiday that has not been taken in a leave year. An employee must take four weeks’ holiday a year but currently can be paid in lieu for the additional 0.8 week’s holiday. From 1 April 2009 when the minimum entitlement rises to 5.6 weeks, an employee will not be able to exchange any untaken leave for payment. However, an employer can determine the rules which apply in respect of any holiday entitlement granted over and above the legal minimum, for example, whether the employee can be paid in lieu of any untaken holiday or carry it over.

Employers will not be affected by these changes if:

  • employees are already entitled to 5.6 weeks’ paid annual leave; and
  • employees are not currently allowed payment in lieu of any untaken holiday.

Employers should check the contracts of employment for new employees to ensure that they reflect the law. Existing employees who are not currently entitled to 5.6 weeks holiday should be notified of the changes either by way of a letter or a notice. This notice should inform the employee of the legislative changes and also inform them of the amount of holiday to which they are entitled in this leave year, if the leave year started before 1 April 2009. There is a tool for calculating this on the Business Link website (www.businesslink.gov.uk).