Does 28 days of annual leave include bank holidays? What you need to know

Annual leave allowance is an important part of an employee’s compensation package, and it’s crucial that employers design their policy in line with employment laws in the UK.

Policy wording within employment contracts is an important part of this, ensuring that employees fully understand what holiday they are entitled to – including whether their permitted days do or don’t include bank holidays.

This article will explore bank holidays as part of an annual leave allowance, including how to decide on a policy for your business, good practice for wording in employment contracts, and what to do if your business is open on bank holidays.

What does 28 days of holiday mean in the UK?

The wording in employment contracts is important when it comes to annual leave. It’s common for employers to offer ‘28 days of holiday’ when they actually mean 20 days of holiday, plus the traditional eight bank holidays off.

It’s important to make this distinction because, without it, employees may think they are entitled to 28 days of annual leave, plus bank holidays – amounting to 36 paid days off.

Employees are entitled to a minimum of 28 days, or 5.6 weeks, of annual leave per year – but an employer can choose to include bank holidays as part of this allowance, decreasing the number of days that employees can choose to take off.

Remember, it’s important to consider all factors before creating your annual leave policy, including the financial implications and team morale.

How should I word my policy in employment contracts?

It’s important that each employee’s annual leave allowance, and what is included within it, is really clear in their employment contract. If the annual leave clause stipulates 25 days plus bank holidays, then it is clear that the entitlement is 25 days of an employee’s choosing in addition to bank holidays – as we’ve mentioned, there are usually eight per year.

If a clause says 28 days of annual leave per year, it will often be interpreted as being inclusive of bank holidays – so, likely, 20 days of an employee’s choosing, plus the eight bank holidays – but it’s still not totally clear. To make your policy really obvious, better wording for this approach would be ‘28 days, inclusive of bank holidays’.

For those who don’t include bank holidays within their annual leave count, example wording could be ‘20 days plus bank holidays’ or – as an example of a more generous annual leave allowance – ‘25 days plus bank holidays’.

If an annual leave policy and what’s included isn’t clear to employees, it leaves your rules open to interpretation and can cause problems for your business further down the line. Employees may challenge what you mean, impacting team morale, or they may interpret it incorrectly without consulting managers and be left with very little annual leave later in the allowance year.

What is best practice when it comes to bank holidays and annual leave?

There is no one-size-fits-all annual leave policy – it’s up to you and what suits your business – but what is essential is that your company’s approach is really clear for employees and fully understood.

Generally, however, if your business closes on bank holidays, you may find it’s less confusing for employees if bank holidays aren’t included in their annual leave allowance. This ensures they’re aware of exactly how many leave days they are able to take while the business is operating.

My business is open on bank holidays – what does that mean for holiday allowance?

For businesses that are open on bank holidays and, therefore, expect employees to work on these days, this should be stipulated in employment contracts.

Remember, there is no legal right to take bank holidays off, but it’s good practice to make this policy clear during the hiring process. As we’ve said, employees are entitled to 5.6 weeks’ of annual leave by law, but that doesn’t need to include bank holidays.

Employees could request to use their annual leave allowance to take a bank holiday off, but whether or not to grant this would be down to the employer’s discretion.

What happens if an extra bank holiday is created?

Occasionally, the government creates one-off bank holidays in addition to the traditional eight per year. Most recently, these have included extra days to celebrate the Platinum Jubilee and Queen Elizabeth II’s funeral in 2022, and the King’s Coronation in 2023.

This can create a conundrum for employers – do employees get the extra day off for ‘free’, or can employers enforce that they must take this day off using their annual leave allowance? The approach will depend on the wording in your employment contracts.

There is no legal right to bank holidays off, so those who usually work bank holidays will tend to  be expected to work as normal.

For businesses that are usually closed on bank holidays, how the extra bank holiday is granted will depend on contract wording. For example, for contracts that stipulate 20 days of holiday plus bank holidays, the employee will get the extra day for ‘free’ – meaning they don’t need to use their allowance to have the extra day off.

For contracts that offer 28 days inclusive of bank holidays, employers can enforce that employees must use their allowance to cover the new bank holiday. However, it’s up to employers to decide whether to enforce this – some employers may grant all staff the day off when there is a one-off extra bank holiday, regardless of what their contracts say. This is a great way to boost team morale, and such gestures can help with talent retention too.

Final thoughts

As an employer, it’s important to make what your annual leave allowance includes very clear from the very beginning. Using careful wording to make it clear whether an allowance does or doesn’t include bank holidays ensures that employees are all on the same page about what they are entitled to.

Remember, employees aren’t legally entitled to bank holidays off, and employers can decide how to approach bank holidays and annual leave.