Navigating holiday entitlement gaps – what employers need to know about bank holidays and statutory leave

Many companies align their holiday years with the financial year. Depending on how their contracts of employment are worded, however, this could leave them with potential issues regarding holiday entitlement for any holiday year, where there are only seven bank holidays.

Key considerations

In most years, England and Wales have eight bank holidays. However, with Easter falling earlier in 2024, there were only seven bank holidays between 1 April 2024 and 31 March 2025.

This would affect full-time employees who are only entitled to the statutory minimum – 28 days including bank holidays – under the Working Time Regulations, subject to how their contract is worded.

For example, if a contract entitles the employee to “20 days plus all bank holidays”, this means the employee would only receive 27 days, falling short of the statutory minimum for that holiday year. The employee would therefore be entitled to an additional day off before 31 March of the relevant financial year.

If the contract simply gives the employee “28 days’ holidays, including bank holidays”, there is no issue.

The problem does not arise if your employees’ holiday entitlement is greater than 28 days.

If any of your full-time employees have this problem, it can be assumed that the same issue may arise for part-time colleagues too.

Will this happen again?

This issue has cropped up before and will crop up again, as the Easter bank holiday dates vary from year to year. Both Easter bank holidays fall in April in 2026, however in the following year, they both fall in March. In 2028, the Easter bank holidays both fall in April. As such, in a holiday year running from April 2026 to March 2027, there will be 10 bank holidays. But, in the holiday year running from April 2027 to March 2028, there will only be six bank holidays.

What should employers in this situation do?

Employers should consider the following:

• Review your employment contracts and assess how the holiday entitlement is worded
• Check whether Easter falling earlier in any given year affects your employees’ statutory holiday entitlement, and consider whether any adjustments are necessary to avoid breaching the Working Time Regulations
• Seek advice on how to rectify any shortfall in statutory holiday for the holiday year running from April to March
• Where possible, communicate early to minimise risk and manage any employee expectations
• Given that these issues will arise again, consider whether you need support with updating your contracts of employment and to address the issue more widely. This is also something that we are recommending more generally, owing to the anticipated implementation of the Employment Rights Bill, as it will become much more difficult for employers to change their employees’ contracts thereafter.