UK: Proposed Increase In Statutory Holiday Entitlement

Last Updated: 29 January 2007
Article by Karen McGill and Katy Wedderburn

Following initial consultation in June last year on proposals to increase the current statutory minimum paid holiday entitlement, the DTI is now consulting on detailed proposals and draft Regulations. The consultation closes on 13th April 2007. The proposed change will mean that, in effect, employers who currently include 8 bank holidays as part of a worker’s 20 day entitlement, will have to instead add them to the 20 day entitlement and DTI research suggests that 22% of the workforce – around 6 million people – will benefit.

Who will be covered by the proposals?

  • All workers covered by the Working Time Regulations 1998 ("WTRs"), the Road Transport Regulations 2005, the Fishing Vessels (Working Time: Sea-fishermen) Regulations 2004 and the Merchant Shipping (Working Time: Inland Waterways) Regulations 2003;
  • The proposals do not extend to workers covered by the Agricultural Wages (Scotland) Act 1949, the Civil Aviation (Working Time) Regulations 2004 or the Merchant Shipping (Hours of Work) Regulations 2002;

What are the key proposals?

  • The WTRs will be amended to increase the annual statutory entitlement to paid holiday, which will be brought in in two phases – an increase:
  1. from 4 weeks to 4.8 weeks from 1st October 2007; and
  2. from 4.8 weeks to 5.6 weeks from 1st October 2008;
  • This will be subject to a maximum statutory holiday entitlement of 28 days;
  • There will be no qualifying period for the additional holiday entitlement but in the first year of employment, employers may limit workers from taking more leave than they have accrued;
  • Partial days’ holiday will not be rounded up to the nearest full day, although employers may wish to do this for ease of administration. Rounding down will not be permissible;
  • The additional holiday may be carried over to the following leave year, subject to the agreement of both employer and employee. There will, however, be no automatic right to carry forward holiday;
  • It will not be possible to make a payment in lieu of any of the 5.6 weeks statutory holiday entitlement, except on termination of employment;
  • In order to calculate entitlement, the proportion of a worker’s leave year that falls into the statutory leave year (1st October to 30th September) is multiplied by the additional holiday entitlement applicable for that leave year.


If a worker currently has 4 weeks’ annual leave entitlement and their leave year begins on 1st January 2007, then the calculation would be:

3 mths/12 mths x 0.8 (weeks’ additional entitlement) = 0.2 weeks

Total entitlement = 4.2 weeks (of which 0.2 weeks may be carried over)

As well as examples, the DTI consultation document sets out a holiday entitlement table, which is reproduced below. The DTI has also indicated that it intends to make available an online calculator.

Will the changes impact on employers who currently give 28 days (or 20 days + bank/ public holidays)?

  • No, except:
  1. Where a worker has to take leave on bank/public holidays as part of their statutory holiday entitlement and the holiday falls whilst a worker is on some other form of leave (e.g. maternity or sick leave), in these circumstances, (s)he would be entitled to take another day instead so as not to be deprived of their statutory entitlement;
  2. Where an employer allows payment in lieu of leave in excess of the current 4 week statutory entitlement, going forward, it will only be permissible to make a payment in lieu of contractual holiday in excess of 5.6 weeks.

DTI Holiday Entitlement Table

The full DTI Consultation document: "Increasing the holiday entitlement – A further consultation" and the draft Regulations – "The Annual Leave (Amendment to Working Time Legislation) Regulations 2007" can be viewed at:


The material contained in this e-update is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.

© MacRoberts 2007

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