Bank Holidays | A Guide for Employers

In England and Wales, there are typically eight bank holidays each year, you can see them all here. Both full-time and part-time employees are legally entitled to 5.6 weeks paid holiday each year. However, the Working Time Regulations 1998 do not differentiate between bank holidays and other days and do not prevent employers from including them in the 5.6-week minimum annual leave entitlement.

There are often a lot of questions around bank holidays; is extra pay required for working bank holidays, how do they work for part-time employees, and what happens if an employee refuses to work? 

This article sets out a complete guide for employers and answers some of the more common issues employers face when it comes to their business and their employees. 

Are employees entitled to have time off for bank holidays? 

Employees do not have a legal entitlement to take bank holidays off work. The availability of time off depends on the specifics outlined in the employee's contract of employment.

If an employee is not entitled to time off on public holidays as per their contract but declines to work, the employer can address this as a disciplinary matter. It is essential for the employer to follow their internal policy for handling disciplinary concerns and adhere to the guidelines outlined in the Acas Code of Practice on disciplinary and grievance procedures.

If the contract states that the employee’s holiday entitlement includes bank holidays or that in addition to their holiday entitlement, they are entitled to take bank holidays off, the employer cannot require the employee to work or take disciplinary action. One option for the employer is to ask the employee to agree in writing to work on the bank holiday in exchange for a day off on another date, or to contemplate offering extra payment for working on that day as a motivator.

Do I have to pay my employees extra for working a bank holiday? 

No additional pay is guaranteed by law for working on a bank holiday. Whether extra pay is provided is determined by the terms outlined in the employee's contract of employment.

Employers must specify the pay rate for working on a bank holiday in their employment terms and conditions. Unless stated otherwise in the contract, employees do not have the right to receive increased pay for working on a bank holiday.

When there is no written agreement, an employee's entitlement to extra pay for working on a bank holiday is based on verbal agreements or customary practices. For instance, if employees have historically received extra pay for working on public holidays, this may have evolved into a contractual right.

What happens when a new bank holiday is announced? 

Every now and then, the government may declare an extra bank holiday. For instance, it sanctioned an additional public holiday in 2023 to commemorate King Charles' Coronation. Nevertheless, it did not automatically entitle an employer's staff to a day off.

Employers should carefully consider their approach to additional bank holidays. For instance, if an employee’s contract states that their holiday entitlement includes bank holidays or that in addition to their holiday entitlement, they are entitled to take bank holidays off, the employer must allow the employee to take the extra bank holiday as leave. 

Even if the employer is not obligated by contract to provide an additional day off, they may opt to do so as a gesture of goodwill towards employees. 

Statutory Entitlement

In 2009, the minimum statutory leave allowance rose from 4 weeks to 5.6 weeks. This means that a full-time employee is entitled to 28 days paid annual leave a year and how bank holidays factor into this is at the discretion of the employer. 

One option is to incorporate bank holidays into the statutory entitlement. This means that within their 28 days of leave, employees would also have days off for bank holidays. Alternatively, employers can provide bank holidays in addition to the statutory entitlement. For example, you could offer a total of 36 days off (28 days + 8 extra days for bank holidays).

How do bank holidays work for part-time staff? 

Under The Working Time Regulations and The Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000, part-time employees should not face unfavourable treatment compared to full-time employees. Regular part-time workers are entitled to a pro rata equivalent of what full-time employees receive.

Employers who give their employees the benefit of bank holidays throughout the year, may also believe that it’s only necessary to grant this benefit if the bank holiday aligns with the employee's regular working days. This misconception can be unjust towards part-time employees, such as those who do not work on Mondays when most bank holidays fall.

It is essential that part-time workers receive an equal holiday allowance to full-time employees throughout the year, including bank holidays, adhering to the pro rata principle. Failing to comply with this constitutes a violation of the Regulations. If a part-time worker is unable to take bank holidays because they fall on non-working days, they should be granted their pro rata entitlement at an alternative time.

How can Hegarty help? 

Whether you are an employee or an employer, our employment law experts can help you with your legal rights around bank holidays. 

If you have any questions or concerns, or if you need your employment contract reviewed following any changes you may be thinking of making, please contact Katie Bowen Nicholas.