Bank Holidays.

In most years, England and Wales have eight bank holidays, but due to Easter falling later in 2025, there are only seven between 1 April 2024 and 31 March 2025.

This could impact employers whose holiday year runs from April to March if they have workers who are only entitled to the statutory minimum holiday under the Working Time Regulations of 5.6 weeks – 28 days for a full-time worker.

Consider the following examples.

If a worker works full time and their contract states that they are entitled to 28 days’ holiday including bank holidays, there is no issue as they will still get their full statutory entitlement: the seven bank holidays plus a further 21 days.

However, if the same worker’s contract was to state 20 days plus bank holidays, without more, they would only receive 27 days’ holiday – a day short of the statutory minimum.

Impacted employers have several options:

1. Give affected workers an extra day’s paid holiday before 31 March.

This is the only legally compliant option.

2. Do nothing and see if anybody raises the issue.

Affected workers might raise grievances; and, in the absence of a resolution, they will have three months from the end of the holiday year to trigger Acas early conciliation with a view to bringing claims.

In the event of a claim, any compensation relating to the breach itself should be limited to the day’s holiday pay that the worker would have received if an additional day’s holiday had been granted – so employers might think that they have nothing to lose in waiting and seeing. However, management time, and potentially legal costs, would be expended in dealing with any complaints, and what price the impact on employee relations?

Further, although an employer might intend to settle any claims before proceedings are commenced, that might not be possible, resulting in protracted proceedings; and if a claimant has not been issued with written particulars of employment that comply with statutory minimum requirements as at the end of the holiday year, an employment tribunal may award, at its discretion, additional compensation equal to either two or four weeks’ pay, subject to the applicable cap (currently £700 per week).

3. Pay affected workers in lieu of an extra day’s holiday.

Payments in lieu of statutory minimum holiday are permitted under the Working Time Regulations only upon the termination of the employment. Accordingly, absent a binding settlement, a worker who receives such a payment could still chance their arm with a claim. We consider that most employment tribunals would award no additional compensation relating to the loss of a day’s holiday in such circumstances – but some might.

In order to make any such payment subject to a binding settlement, there would need to be either a formal written settlement agreement or an Acas conciliated settlement – but it would be for employers to consider whether it would be proportionate to bother with formal settlement.

A settlement agreement would require the worker to obtain independent legal advice, and the employer would be expected to make a reasonable payment in respect of those legal fees; and if solicitors are instructed to prepare the agreement for the employer, that would incur additional cost.

Therefore, if an employer was to require formal settlement, Acas conciliation would appear to be the more sensible option. For higher value claims, we would encourage employers to obtain specialist advice in connection with preparing the wording for Acas-conciliated settlements, but for this type of claim employers might avoid incurring fees – unless, perhaps, there are a number of claims to be settled and it will be proportionate to instruct a solicitor to prepare template wording to be utilised for multiple settlements.