UK Employment Law: Staff Leave, Sick Pay, and Holiday Rights

Managing staff leave in the UK means navigating a patchwork of legislation, regulations, and case law. Getting it wrong can lead to tribunal claims, financial penalties, and damaged staff relationships. This guide brings together every key piece of UK law that affects staff leave - annual holiday, sick pay, bank holidays, rejected requests, and what happens to leave that is not taken - so you have everything in one place.

1. Annual Leave Entitlement

Working Time Regulations 1998

This is the foundation of holiday law in the UK. Almost all workers are entitled to a minimum of 5.6 weeks of paid annual leave per year. For someone working five days a week, that equals 28 days. The entitlement is capped at 28 days under the statutory minimum, even for workers who work six or seven days a week. Employers can offer more than 28 days but never less.

The 5.6 weeks is made up of two components:

• 4 weeks (20 days) - derived from the EU Working Time Directive, retained in UK law after Brexit.
• 1.6 weeks (8 days) - the additional UK top-up introduced by the Working Time Regulations.

This distinction matters because the rules on carrying over unused leave differ between these two components (see section 6 below). For a full breakdown of how entitlement works, including worked examples, see our UK holiday entitlement guide.

Employment Rights Act 1996

This Act underpins many employment rights including the right to a written statement of employment particulars, which must include details of holiday entitlement. If an employee's contract does not specify their leave entitlement, the statutory minimum under the Working Time Regulations still applies automatically.

2. Part-Time and Pro-Rata Rights

Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000

Part-time workers are entitled to the same rights as full-time workers on a pro-rata basis. This includes annual leave, sick pay, access to pension schemes, and training opportunities. It is unlawful to treat part-time staff less favourably simply because they work fewer hours.

The pro-rata formula for holiday entitlement is: days worked per week × 5.6 = annual leave in days. A worker doing three days a week receives 3 × 5.6 = 16.8 days. Use our pro-rata calculator to work out entitlement for any pattern. For detailed guidance on calculating part-time leave including bank holidays and irregular hours, see our part-time holiday entitlement guide.

Working Time Regulations 1998 (Irregular Hours)

From 1 January 2024, a specific method applies to irregular hours and part-year workers: entitlement accrues at 12.07% of hours worked in each pay period. This is particularly relevant for zero-hours contract workers and term-time-only staff.

3. Bank Holidays

Banking and Financial Dealings Act 1971

This Act defines bank holidays in England, Wales, Scotland, and Northern Ireland. However, it only gives banks and financial institutions the right to close on those days. It does not give employees a legal right to time off on bank holidays.

There is no standalone right to bank holidays off

This is one of the most commonly misunderstood areas of UK employment law. Whether employees get bank holidays off depends entirely on their employment contract. Employers can:

• Include bank holidays within the 28-day statutory minimum (e.g. 20 days + 8 bank holidays = 28).
• Offer bank holidays on top of the statutory minimum (e.g. 25 days + 8 bank holidays = 33).
• Require staff to work on bank holidays, provided they still receive their full 5.6 weeks of leave.

The key legal requirement is that bank holiday arrangements must not discriminate against part-time workers. If full-time staff receive bank holidays as additional days, part-time staff must receive the pro-rata equivalent. For the full list of dates, see our UK bank holidays 2026 guide.

4. Statutory Sick Pay (SSP)

Social Security Contributions and Benefits Act 1992

Employees who are too ill to work are entitled to Statutory Sick Pay (SSP) from their employer. The key rules are:

• Rate: £116.75 per week (2025/26 tax year). This rate is reviewed annually.
• Waiting days: SSP is not paid for the first three qualifying days of absence. Payment starts from the fourth day.
• Duration: SSP is payable for up to 28 weeks in a single period of incapacity for work.
• Eligibility: The employee must earn at least the Lower Earnings Limit (£123 per week in 2025/26) and must be off work for four or more consecutive days (including non-working days).
• Evidence: Employers can ask for self-certification for the first seven days. From day eight, a fit note (previously a sick note) from a doctor is required.

Contractual Sick Pay

Many employers offer sick pay above the statutory minimum through their employment contracts. This is known as contractual sick pay or occupational sick pay. There is no legal requirement to offer more than SSP, but many businesses choose to provide full pay for a set number of days (for example, 10 days at full pay, then SSP thereafter). The terms must be clearly set out in the employment contract or staff handbook.

Fit Notes and Return to Work

The fit note system was introduced by the Social Security (Medical Evidence) and Statutory Sick Pay (Medical Evidence) (Amendment) Regulations 2010. A doctor can declare the employee either "not fit for work" or "may be fit for work" with recommendations such as amended duties, altered hours, workplace adaptations, or a phased return. Employers should consider these recommendations and discuss them with the employee.

5. Can an Employer Refuse a Holiday Request?

Working Time Regulations 1998, Regulation 15

Yes. Employers have the legal right to refuse a holiday request, but they must follow the correct notice procedure. Under Regulation 15:

• An employee must give notice of at least twice the length of the leave requested. For example, to take one week off, the employee must give at least two weeks' notice.
• An employer can refuse the request by giving a counter-notice of at least the same length as the leave requested. To refuse one week of leave, the employer must give at least one week's counter-notice.

These are the default rules unless the employment contract specifies different notice periods. Many employers set their own notice requirements in their absence policy, which is perfectly lawful provided it does not prevent employees from taking their full statutory entitlement during the leave year.

Employer's Right to Direct When Leave Is Taken

Under the same regulations, employers can require employees to take leave on specific dates, provided they give sufficient notice. This is commonly used for:

• Shutdown periods: Factory closures, Christmas closures, or summer shutdowns where the business closes and all staff must use annual leave.
• Restricted periods: Blocking leave during peak trading periods (e.g. December in retail).

The employer must give notice of at least twice the length of the leave period they are directing. To require employees to take one week off during Christmas, the employer must give at least two weeks' notice.

The Employer Cannot Prevent Leave Entirely

While individual requests can be refused, an employer must not prevent an employee from taking their full statutory entitlement during the leave year. If repeated refusals effectively deny an employee their holiday, this could lead to a tribunal claim under the Working Time Regulations.

6. Untaken Leave: Carry-Over Rules

The Default Position

The rules on carrying over unused annual leave depend on which part of the 5.6-week entitlement we are talking about:

• The additional 1.6 weeks (8 days): Under Regulation 13A of the Working Time Regulations, these days can only be carried over if a relevant agreement (the employment contract, a collective agreement, or a workforce agreement) permits it. If the contract is silent, these days are lost at the end of the leave year - "use it or lose it."
• The core 4 weeks (20 days): Under Regulation 13, these cannot generally be carried over. However, case law has established important exceptions (see below).

Exceptions Where Carry-Over Is Required

UK and European case law has established that the core four weeks must be carried over in certain circumstances:

• Sickness: If an employee was unable to take leave due to sickness, the untaken leave carries over. The leading case is NHS Leeds v Larner [2012], which confirmed that workers on long-term sick leave can carry over the 4-week EU entitlement. The carry-over period is limited to 18 months from the end of the leave year in which it accrued (Plumb v Duncan Print Group Ltd [2015]).
• Maternity and family leave: A worker on maternity, adoption, shared parental, or paternity leave who cannot take annual leave during that period is entitled to carry it over.
• Employer failure: If the employer prevented or discouraged the employee from taking their leave, the untaken days must be carried over. The employer has a positive obligation to encourage workers to take their leave and to inform them that untaken leave will be lost (Kreuziger v Land Berlin [2018] and Max-Planck-Gesellschaft [2018]).

COVID-19 Carry-Over (Extended Rules)

The Working Time (Coronavirus) (Amendment) Regulations 2020 allowed workers who could not take their leave due to the pandemic to carry over up to four weeks of leave into the following two leave years. These extended carry-over provisions expired for most workers by the end of the 2023/24 leave year.

7. Payment for Untaken Leave on Termination

Working Time Regulations 1998, Regulation 14

When an employee leaves a job, they are entitled to be paid in lieu of any statutory leave they have accrued but not yet taken. The calculation is based on the proportion of the leave year that has elapsed.

Conversely, if an employee has taken more leave than they have accrued at the point of leaving, the employer may deduct the overpayment from their final pay - but only if there is a clear contractual clause permitting this. Without such a clause, the employer cannot make the deduction.

Holiday Pay Calculation

Following a series of case law decisions, holiday pay for the first four weeks must reflect what the worker would normally earn, including:

• Regular overtime (both guaranteed and non-guaranteed)
• Commission payments
• Regular bonuses and allowances

The reference period for calculating average pay is the 52 weeks immediately preceding the holiday, ignoring any weeks with no pay and looking back up to 104 weeks to find 52 paid weeks. This was established by the Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018.

8. Anti-Discrimination and Leave

Equality Act 2010

The Equality Act protects employees from discrimination based on protected characteristics including disability, pregnancy, religion, and age. This has several implications for leave management:

• Disability-related absence: Using absence triggers (such as the Bradford Factor) to penalise disability-related absence may constitute disability discrimination. Employers should make reasonable adjustments, which may include discounting disability-related absence from trigger calculations.
• Pregnancy-related sickness: Absence due to pregnancy-related illness must not be counted against the employee or used in absence management procedures.
• Religious holidays: Employers are not legally required to grant time off for religious holidays, but refusing requests without good business reason could amount to indirect religious discrimination if it disproportionately affects members of a particular faith.

9. Family-Related Leave

Several pieces of legislation provide statutory leave entitlements for family-related reasons. These are separate from annual leave and cannot be deducted from the holiday allowance:

10. Other Statutory Leave Rights

• Jury service: Under the Juries Act 1974, employees have a right to time off for jury service. The employer does not have to pay them (the court provides allowances), but many employers choose to maintain full pay.
• Public duties: Under the Employment Rights Act 1996, s.50, employees who hold certain public positions (magistrates, local councillors, school governors) are entitled to reasonable unpaid time off.
• Trade union duties: Under the Trade Union and Labour Relations (Consolidation) Act 1992, union representatives are entitled to reasonable paid time off for union duties and reasonable unpaid time off for union activities.
• Redundancy - time off to look for work: Under the Employment Rights Act 1996, s.52, employees under notice of redundancy with two or more years' service are entitled to reasonable paid time off to look for new employment or arrange training.

Quick Reference: Key Legislation

Disclaimer: This guide is for general information only and does not constitute legal advice. Employment law is subject to change. For specific situations, consult a qualified employment lawyer or ACAS (the Advisory, Conciliation and Arbitration Service).