Holiday Clauses in Employment Contracts

Holiday clauses should clearly state entitlement, procedures for booking, and what happens to untaken leave.

Statutory Minimum

Basic Entitlement

All workers are entitled to:

• 5.6 weeks paid holiday per year
• For 5-day week workers: 28 days
• Pro-rata for part-time workers

Can Include Bank Holidays

"Your annual holiday entitlement is 28 days including the 8 UK bank holidays."

or

"Your annual holiday entitlement is 25 days plus UK bank holidays."

Holiday Clause Structure

Basic Clause

"Your annual holiday entitlement is [X] working days per holiday year, plus public holidays. The holiday year runs from [1 January to 31 December / date of joining]. Holiday must be taken in accordance with the Company's holiday policy."

Enhanced Entitlement

"Your annual holiday entitlement is:

• On joining: 25 days
• After 2 years: 27 days
• After 5 years: 30 days

Plus UK bank holidays, or time off in lieu if required to work on a bank holiday."

Part-Time Workers

"Holiday entitlement is calculated pro-rata based on your working hours compared to full-time hours. Your entitlement is [X] days/hours per year."

Booking Holiday

Notice Requirements

Legal default (can be varied by contract):

• Employee must give notice equal to holiday requested
• Employer can refuse with notice equal to holiday requested

Clause Example

"Holiday requests must be submitted via [system/form] at least [2 weeks / 1 month] in advance. Approval is subject to business needs and manager discretion. The Company may refuse requests during busy periods."

Restrictions

"No more than [10 consecutive working days] may be taken at one time without prior approval from [manager/director]. Holiday requests during [peak periods] may be restricted."

Carry-Over

Statutory Requirements

Must allow carry-over when:

• Employee was on sick leave
• Employee was on family-related leave
• Employer failed to allow employee to take holiday

Contractual Carry-Over

"Up to [5] days of unused annual leave may be carried forward to the next holiday year, to be taken by [31 March]. Carried forward leave not taken by this date will be forfeited without payment."

No Carry-Over Clause

"Holiday must be taken within the holiday year. Unless prevented by circumstances beyond your control, untaken holiday cannot be carried forward and will be lost."

Payment in Lieu

During Employment

"You may not receive payment in lieu of untaken holiday except on termination of employment."

On Termination

"On termination, you will receive payment for accrued but untaken holiday, calculated at [1/260th / 1/365th] of annual salary per day."

Excess Holiday Taken

"If on termination you have taken more holiday than your accrued entitlement, the Company may deduct the excess from your final pay at your daily rate."

Holiday Year

Options

1. Calendar year: 1 January to 31 December
2. Financial year: 1 April to 31 March
3. Anniversary: From date of joining

"The holiday year runs from [date] to [date]. For employees joining part-way through the year, entitlement is calculated pro-rata from the start date to the end of the holiday year."

Working on Bank Holidays

Clause Options

Time off in lieu:

"If you are required to work on a UK bank holiday, you will receive a day off in lieu to be taken within [3 months]."

Enhanced pay:

"If you are required to work on a UK bank holiday, you will be paid at [time and a half / double time] in addition to your normal salary."

No additional entitlement:

"Your role may require working on bank holidays. Bank holidays worked form part of your normal duties with no additional pay or time off."

Holiday During Notice Period

Employer Requiring Holiday

"During your notice period, the Company may require you to take any accrued but unused holiday by giving appropriate notice."

Employee Requesting Holiday

"Holiday requests during notice periods are subject to manager approval and business needs."

Long-Term Sickness

Accrual During Sick Leave

Statutory holiday (4 weeks/20 days) continues to accrue during sick leave. The additional 1.6 weeks (8 days) doesn't legally accrue.

Carry-Over

"Holiday that cannot be taken due to long-term sickness may be carried forward for up to [18 months] from the end of the holiday year in which it accrued."

Holiday Pay Calculation

Regular Hours

For employees with regular hours:

• Based on normal weekly pay
• Include regular overtime and commission

Irregular Hours

For workers with irregular hours (including zero-hours):

• Calculate average pay over 52-week reference period
• Exclude weeks with no pay

"Holiday pay is calculated based on your average weekly earnings over the 52-week period prior to the holiday (excluding any weeks with no earnings)."