Employers operating a holiday year spanning from 1 April to 31 March may face the potential risk of claims related to unlawful wage deductions stemming from holiday underpayment this year.
In England and Wales, there are typically eight bank holidays per calendar year, subject to exceptional events such as the King’s coronation in 2023.
While many bank holidays fall on consistent dates annually, the dates of Good Friday and Easter Monday vary considerably. In 2024, Good Friday was observed on 29 March, leading to nine bank holidays during the 2023/2024 holiday year. However, as Easter this year will not occur until mid-April, some workers may risk receiving less than the statutory minimum holiday entitlement of 28 days.
Under the provisions of the Working Time Regulations 1998, workers are entitled to a statutory minimum holiday of 5.6 weeks, which for a full-time worker amounts to 28 days, inclusive of bank holidays. However, there is a potential risk that some workers may receive only 27 days of holiday this year, which could result in a breach of the Regulations.
This risk depends entirely on the specific wording of the contractual clauses concerning annual leave entitlement. To address this, employers are advised to carefully review existing employment contracts to identify any workers who may be affected by this discrepancy.
If the contract stipulates that workers are entitled to 28 days of holiday per year, including bank holidays, there is no risk to the employer and no further action is required. Workers still receive the statutory minimum of 28 days, regardless of the allocation of bank holidays within those days.
However, if the contract specifies an entitlement of 20 days of holiday plus bank holidays, or outline the specific days designated as bank holidays, workers may inadvertently end up with only 27 days of annual leave in the 2024-2025 holiday year, if their holiday year runs from 1 April to 31 March. This falls below the statutory minimum. In such cases, employers may wish to provide an additional day of leave before 31st March 2025, clearly indicating that this additional leave is specific to the 2024/2025 holiday year, given the timing of the Easter break.
Failure to take corrective action is likely to constitute a breach of the Working Time Regulations 1998 and could allow affected workers to lodge claims for unlawful deductions from wages due to underpaid holiday entitlement. Should such claims proceed, the employment tribunal will review only the current holiday year entitlement, which is likely to result in a determination that workers were underpaid.
To avoid the risk of this issue arising, we would normally recommend total holiday entitlement to be expressed in the contract as being inclusive of bank holidays.
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The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at March 2025.