Employers’ guide to employee holiday and leave entitlement

The Summer holidays are fast approaching and if you are an employer, you may soon be inundated with holiday forms from your workforce, as staff begin to prepare for their holidays.

Although a lot of businesses have a workforce structure that enables adequate cover during holiday season, there are some that struggle due to the lack of staff and or financial resources to provide cover, during the holidays.

It is therefore important that you know your rights as an employer and authorise holidays according to the demands of the business.

Minimum annual leave entitlement

As a starting point, every worker, with the exception of some excluded sectors, is now entitled to a minimum of 28 days (5.6 weeks) annual leave, which includes all bank holidays.

If the employee works less than 5 days a week then this must be calculated proportionally. For example, if they work 2.5 days a week then this would be 14 days a year.

Surprisingly, though, if an employee works over 5 days a week, for example 6 days a week, they are still only entitled to the 28 days. This is because the amount has been capped at 28 days.

You as the employer may also be interested to know that according to the law, an employee cannot demand specific dates for their holiday. You as the employer have the power to refuse the employee’s request if the time off does not suit your business’s requirements.

Furthermore, if you as the employer require the staff member to take annual leave due to a predicted quiet period, seasonal office closure, or for any reason that suits the business, then the staff member cannot refuse to take annual leave.

Dealing with requests for annual leave

However, in agreeing or refusing an annual leave request, the employer must be certain that it is done fairly and that it doesn’t discriminate against the employee.

For example, if an employee wants to take time off during the busy period to attend a religious festival then you may accommodate this request in circumstances where you would refuse such a request made for leisure purposes.

Gwen Faulkner from Lloyds Employment Law Consultancy further clarifies,

“If you have a new staff member starting work that requests annual leave at the commencement of their employment, you can agree to this if you choose to, however, legally, the new staff member is only entitled to take the annual leave that they accrue over their first year of employment. This accrual is at the rate of one twelfth of her annual leave entitlement on the first day of each month of that year. This prevents employees from taking their full entitlement before they have actually done any work.”

Holiday pay, sickness and bank holidays

In addition, it is now unlawful to pay an employee ‘rolled up’ holiday pay. This was the practice where employers made ‘rolled-up’ hourly or weekly contractual payments to their employees which expressly included an element of holiday pay, and then make no additional payments when they actually took annual leave.

This practice was found to discourage employees from taking their annual leave as the fewer holidays they took the more they were paid – this practice of course, bred a whole lot of different problems and so has now been abolished.

Employers will also be interested to know that their employees are ‘not’ entitled to bank holidays, as there is not a statutory right to bank holidays, unless it is in your employee’s contract or through custom and practice will an employee have this right.

Furthermore, employers are entitled to count public and bank holidays towards the 28 days the employee is entitled to have off from work.

Additionally, if one of your employees fell sick during their annual leave, there is nothing in theory to prevent a worker from taking their holiday entitlement at a time when they are sick.

Similarly there is not a legal right for the employee to cancel their holiday request in order to take sick leave. However, if your employee was genuinely sick and they have complied with the notification requirements and evidence requirements you require, then you may treat the time away as sick leave and pay accordingly. This is because if they have been ill they may not have had the break from work they may have needed.

And finally, if your employee has enjoyed the sangria and holiday romance a little too much and returns to work a few days late, legally the employee is absent without leave, so they are not entitled to be paid. So therefore, it is up to you to treat it as any other disciplinary matter if you choose to.

This guide was written for ByteStart by Gwen Faulkner of Lloyds Employment Law Consultancy. For more information about your rights as the Employer regarding Employee annual leave, you can contact her by phone on: 0844 7700 656 or Email: gwen.faulkner@lelc.co.uk

Last updated: 19th February, 2021

Combine all of your old pensions into one online plan

Sign up in 5 minutes - over 300,000 users, including the Bytestart team!

Superscript no-ties business insurance - pay monthly

Tailored just for you + pay monthly. You could be covered in just 10 minutes.

Tide Business Bank Account - £40 welcome bonus!

Exclusive for Bytestart readers + 12 months' free transfers. Find out more.

FreeAgent Online Accounting - 55% off - ByteStart exclusive!

Brilliant software. Get 55% of your first 6 months, then 10% for life.

Related articles

  • copyright

    Guide to copyright law for small firms – what is protected?

    Copyright law is one of the key areas of intellectual property protection. In the UK, protection applies automatically once the work is created, so there is nothing further that needs to be done by an…

  • legal position contract coronavirus

    What are the legal implications if you can’t fulfil a contract

    Where do you stand legally if you have outstanding contracts that you cannot fulfil through no fault of your own, or have contracts with others for the supply of goods or services which they cannot…

  • Health & Safety compliance for small businesses – where do you start?

    When you are starting a business, sitting down and grappling with Health & Safety legislation isn’t one of your top priorities. It’s fair to say that it’s not one of the more exciting parts of…