UK Bank holiday loophole that could put you in court

Does your annual leave year run April to March?

If so you are probably breaching UK employment legislation due to a little know bank holiday loophole !

Are you aware of how easter holidays and its impact on employees holiday entitlements?

It is crucial employers navigate the complexities of holiday entitlements, ensuring compliance with statutory requirements and maintaining fair treatment of employees.

A timely issue that needs addressing is the variability of Easter holidays and its impact on holiday entitlements.

With Good Friday falling on March 29 and Easter Monday on April 1 in 2024, employers must carefully review their holiday policies to avoid potential legal ramifications.

Do you fully understand the contractual Implications of easter holidays on employees legal leave entitlements ?

For contracts stating “20 days + bank holidays,” the period between April 1, 2024, and March 31, 2025, poses a unique challenge.

During this leave year, there is no Good Friday bank holiday, resulting in only seven bank holidays instead of the usual eight.

This brings the total holiday entitlement to 27 days (20 days + 7 bank holidays), which is below the statutory minimum of 28 days. Consequently, this situation constitutes a breach of contract, exposing employers to legal risks.

Legal Ramifications and historical context for not giving employees the correct annual leave

Employers failing to meet the statutory minimum holiday entitlement can face claims for the unlawful deduction of wages. This situation is not unprecedented.

Over the past decade, there have been instances where employers faced legal action due to miscalculations in holiday entitlements, particularly when public holidays fluctuated.

Such cases underscore the importance of vigilance and proactive management of holiday policies.

What options do employers have to ensure employees get the legal holiday entitlement ?

To address the shortfall in holiday entitlement for the 2024-2025 leave year, employers have a couple of options:

1. Add an Extra Paid Holiday: Employers can add another paid holiday to the leave year, ensuring the total holiday entitlement meets the statutory minimum of 28 days. This straightforward solution ensures compliance and avoids potential legal issues.
2. Amend Contractual Terms: Employers could negotiate with employees to agree on a variation to the terms and conditions, changing the holiday entitlement to “28 days including any bank holidays.” This approach provides flexibility and ensures compliance regardless of the variability in public holidays.

Understanding the variability of easter bank holiday loophole.

The variability of Easter holidays continues to pose challenges in future years. For example:

• Holiday period from April 1, 2026, to March 31, 2027, there would be 10 bank holidays,
• Holiday period from April 1, 2027, to March 31, 2028, would only have 6 bank holidays.
• 2028: Easter shifts back to April, repeating the cycle

This fluctuation can create significant discrepancies in holiday entitlements if not carefully managed.

Why should employers change the annual leave policies ?

Amending the holiday entitlement to “28 days including any bank holidays” provides a stable and predictable framework, mitigating the impact of fluctuating public holidays.

This approach ensures that employees receive their full entitlement without the need for annual adjustments. Additionally, it promotes fairness and consistency, enhancing employee satisfaction and reducing the risk of legal disputes.

Conclusion

Employers must stay vigilant and proactive in managing holiday entitlements, especially with the variability of Easter holidays. By ensuring compliance with statutory requirements and considering fair treatment of employees, employers can avoid potential legal ramifications and foster a positive workplace environment.

As HR consultants, we recommend reviewing and, if necessary, amending holiday policies to ensure they align with statutory requirements and adapt to the fluctuating nature of public holidays.