Holiday Entitlement Clause in UK Contracts: What It Means & Example Wording

When to Include a Holiday Entitlement Clause

• In every employment contract — it is a legal requirement to state holiday entitlement in the written statement of employment particulars
• In zero-hours and casual worker contracts where holiday accrues on a pro-rata basis and the calculation method should be transparent
• In contracts for workers who join or leave mid-year to specify how entitlement is calculated and whether unused leave is paid out on departure

Example Wording

This example wording is illustrative only. Customise it to your specific circumstances and consider seeking legal advice.

Is a Holiday Entitlement Clause Enforceable in the UK?

Holiday entitlement clauses are enforceable and are underpinned by the Working Time Regulations 1998, which provide a statutory minimum of 5.6 weeks' paid annual leave for full-time workers. This is a day-one right with no qualifying period. The statutory entitlement cannot be replaced by a payment in lieu except on termination of employment. Where the contractual entitlement exceeds the statutory minimum, the additional leave is governed by the contract. The Supreme Court in Harpur Trust v Brazel [2022] UKSC 21 confirmed how holiday entitlement is calculated for part-year workers, requiring the full 5.6 weeks regardless of weeks worked.

Common Mistakes

• Stating '20 days plus bank holidays' and assuming this meets the statutory minimum — it does (20 + 8 = 28), but if any bank holidays fall on non-working days, the calculation may fall short
• Applying a pro-rata reduction for part-year workers based on hours or weeks worked — following Harpur Trust v Brazel, this is incorrect for the statutory entitlement
• Implementing a 'use it or lose it' policy without understanding the EU-derived case law — workers who were unable to take leave due to sickness or the employer's failure to facilitate leave may have a right to carry it over