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Increased Holiday Entitlement Documents and updated Contracts of Employment

August 2009

Increased Holiday Entitlement Documents , plus updated Contracts of Employment

Under the Working Time (Amendment) Regulations 2007, on the 1st April 2009 the minimum annual leave entitlement will increase from 4.8 weeks per year to 5.6 weeks per year, pro rated for part time employees. This statutory holiday entitlement includes bank holidays.

In addition to this increase in Statutory Holiday Entitlement, new regulations will also apply to payment in lieu in respect of statutory holiday entitlement and carry over of unused annual leave.

What Does this Mean for Employers?

For many employers the new Regulations will not have much or any effect on their employees. Providing your employees, pre 1st Oct 2007, received 20 days holiday per year (pro rata for part time workers), did not work on public holidays (or receive time off in lieu when they do) and were not able to replace holiday with payment in lieu or carry it over beyond the next leave year, then you will be affected by the new Regulations, as the new minimum holiday entitlement is inclusive of public holidays.

If this is the case you may wish to inform your employees of the change in legislation whilst reassuring them that they already receive holiday entitlement in line with the new Limits.

Those businesses which are most likely to be affected are those operating in the retail, service and hospitality sectors. Any employer whose staff are entitled to less than 28 days holiday including bank holidays will be obliged to increase the leave to which their employees are entitled.

Employers will not need to reissue or vary current employment contracts as the change is to the benefit of employees and is guaranteed by statute. Employers will however have a duty to inform staff of any increase in holiday entitlement through either a letter or a short statement, for example on a pay slip.

Workers must take a minimum of four weeks holiday in each leave year.

Payments in Lieu

From 1st Oct 2007 to 1st April 2009, payment in lieu could be given in respect of the increased holiday entitlement if it is agreed by both employer and employee. This is now no longer permitted. Payment in lieu of holidays above the statutory minimum can be allowed depending on the contract of employment.

Leave Carry Over

The additional holiday entitlement may be carried over to the following leave year, provided it is agreed to by both the employer and employee. As with the rules on payments in lieu however, only the additional leave over 4 weeks (pro rated for part timers) is eligible for carry over.


The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.

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