Employment Practice comments on increase to statutory annual leave

Until 1 October 2007, in accordance with the Working Time Regulations 1998, full time workers were entitled to 4 weeks (or 20 days) statutory annual leave inclusive of bank and public holidays.

With effect from 1 October 2007 statutory annual leave has increased for most full time workers from 20 days a year to 24 days a year (or technically 4.8 weeks statutory annual leave) (inclusive of bank and public holidays).

There will be a further increase to 28 days per annum (5.6 weeks per annum) from 1 April 2009. These changes mean that full time workers will eventually be entitled to 28 days statutory annual leave inclusive of bank and public holidays. However, even though workers will eventually be entitled to 28 days statutory annual leave there will not be a statutory right or obligation to take the additional leave on the bank holidays themselves.

All part time workers will be entitled to statutory minimum holiday on a pro rata basis (which reflects the previous position).

Payment in lieu of the additional days (i.e. the additional 4 days) will be possible until 1 April 2009. After 1 April 2009, it will not be possible to make a payment in lieu of accrued untaken statutory annual leave, except on termination.

Although it was not previously permissible under the Working Time Regulations to carry over unused statutory holiday entitlement into the next holiday year, employers and workers are now able to agree that the additional holiday entitlement (i.e. the additional 4 days) can be carried over into the next annual leave year.

The increase from 1 October 2007 will be calculated proportionately depending on when the leave year starts. The Department for Business Enterprise and Regulatory Reform (formally the DTI) has published an online calculator to enable employers to calculate the increased holiday entitlement for existing workers. This is available on the DBERR website (www.berr.gov.uk).

Employers who already provide their workers with at least 28 days paid annual leave each year (e.g. 20 days plus bank holidays) will be exempt from the new provisions and do not need to take any further action so long as they do not pay lieu in relation to the 28 days (except on termination) and only allow workers to carry over holiday entitlement in excess of the 20 days into the next holiday year.

Employers who do not already provide their workers with 24 days statutory annual leave should now do so and employees (rather than workers) should be given written notification of the changes to their employment particulars.

Contact Marian Derham or Joanne Twiss on 020 7667 5000 for further details.