Holidays and holiday pay

As your entitlement to holidays and holiday pay in the UK is based on EU law, it is at risk from Brexit.

While the UK is currently bound by the terms of the EU Working Time Directive (WTD), it is unclear what will happen at the end of the Brexit transition period.

If you are a full-time worker, you have the right – from your first day of employment – to 5.6 weeks' holiday a year. This comprises four weeks' holiday under the WTD, and an extra 1.6 weeks from UK legislation – the Working Time (Amendment) Regulations 2007.

You can work out how many days off you should get in 12 months by multiplying 5.6 by the number of days you work each week. For example, if you work a five-day week, you are entitled to (5.6 x 5 =) 28 days a year. The UK government website has a holiday calculator.

Normally, you must take your four weeks of WTD holiday in the year in which your holiday builds up, or 'accrues'. You are, though, allowed to carry forward that holiday if you were unable to take it because:

  • You were ill.
  • You were on maternity leave.
  • In the words of the WorkSmart website, 'your employer refused to provide you with paid holiday, making it impossible for you to exercise your holiday rights in the correct holiday year'. This could be, for example, if your employer mis-classified you as self-employed when you are really a worker entitled to paid holiday. Employers who behave in this way are taking a significant risk. The NUJ and other unions have won many claims in the employment tribunal, securing holiday pay for thousands of workers.

If you could not take your holiday for any of these reasons, your employer is allowed to limit the time in which it must be taken to 18 months after the end of the holiday year in which it was accrued.

A ruling by the European Court of Justice (ECJ) in 2019 means your employer must encourage you to take your full entitlement. You cannot lose your unused WTD holiday unless your employer has ensured in good time that you got the chance to take it, and sent you reminders and warnings that you might lose it.

In contrast, the extra 1.6 weeks of holiday provided by UK law can be carried forward into the next holiday year if a 'relevant agreement' allows for it. This is typically a term in your employment contract, or a specific holiday procedure. If there is no relevant agreement with your employer, you have no right to carry forward this holiday.

Your employer is not allowed to replace your statutory holiday with a payment in lieu – even if you agree to it. The only exception to this is when your employment comes to an end. This is because annual leave is regarded as having a health and safety purpose that should not be compromised.

You must be paid for any unused statutory holiday at the end of your employment contract. This holds in all circumstances – even if you have been dismissed for gross misconduct.

Calculating holiday pay

In the UK, statutory holiday pay must include any 'guaranteed' overtime. This is contractual overtime that your employer must offer, and you must accept. This applies to all 5.6 weeks of statutory holiday.

Holiday pay has been improved by rulings in both European and UK courts. Rulings from the ECJ apply only to the four weeks of holiday under the WTD. Many employers, though, have chosen to ignore the distinction and calculate all 5.6 weeks of holiday pay in the same manner.

The ECJ ruled in 2011 that holiday pay must be the same as your normal wages. It must include all the pay components you would normally have earned, had you been at work rather than on holiday. The Court's reasoning was that workers might be put off from taking holiday if they thought they were going to lose money. The same ruling also required holiday pay to include any component of normal wages regarded as being "linked intrinsically" to the performance of the worker's contractual tasks.

Other ECJ rulings have confirmed that:

  • Holiday pay must include all regularly worked overtime and all other regular payments.
  • Holiday pay must include regularly worked voluntary overtime

  • If some or all of a worker's pay is made up of results-based commission, holiday pay must include any commission the worker would have earned if they had not been on holiday.

Holiday pay must also cover any travel time payments, shift or weekend premium payments, and anti-social hours payments.

Your employer cannot calculate your holiday pay based on basic pay alone. If you are concerned about how your employer arrives at a figure for your holiday pay, speak to your NUJ rep or an official.

If you do not have a normal pattern of working hours – for example, if you work intermittent shifts under a zero hours contract – then a week's holiday pay must be based on your average weekly pay in the year before you take the holiday. Any weeks in which you earned nothing should be disregarded. The same arrangements apply if you work irregular hours under a permanent contract, but for only part of the year. The 52-week reference period was introduced in April, 2020; prior to this, the figure was 12 weeks.

Notice of holiday