Additional Bank Holiday
What Should Employers Do If An Additional Bank Holiday Is Announced?
From time to time, the UK Government announces an additional bank holiday to mark a significant national event. Recent examples include the Platinum Jubilee of Queen Elizabeth II, the State Funeral of Queen Elizabeth II and the Coronation of King Charles III. Whenever an extra bank holiday is announced, one of the first questions employers ask is whether employees are automatically entitled to the day off. Whilst many employees assume the answer is yes, the legal position is often more complicated. In most cases, an employee’s entitlement will depend on the wording of their contract of employment and any holiday policies that apply within the organisation. Employers therefore need to carefully review their contractual arrangements before making any decisions. In this article, we explain how additional bank holidays affect employee holiday entitlement, the options available to employers and the practical steps businesses should take when an extra bank holiday is announced.
Are Employees Automatically Entitled To An Additional Bank Holiday?
When an additional bank holiday is announced, one of the first questions employers ask is whether employees are entitled to the extra day off. The answer is not always straightforward. There is no automatic entitlement to an additional bank holiday and whether employees are entitled to the extra day will usually depend on the wording of their contract of employment and any holiday policy that applies.
Previous Additional Bank Holidays And Custom And Practice
Employers should also consider whether previous decisions may have created expectations within the workforce. If additional bank holidays have been granted in the past, employees may reasonably expect the same approach to be adopted in the future.
Over time, a consistent pattern of behaviour can potentially create a contractual entitlement through custom and practice, particularly where a benefit has been provided regularly, consistently and without qualification.
This does not mean that every previous decision automatically becomes contractual. However, employers should consider both the legal position and the employee relations implications before reaching a decision.
Example Contract Wording
There are many different ways of wording bank holiday entitlement in the holiday entitlement clause of the contract. For example, there can be a significant difference between employees who are entitled to “20 days plus bank holidays” and those who receive “28 days including bank holidays”. Small variations in wording can have a direct impact on whether an employee is entitled to an additional day’s paid leave.
Where The Contract States “20 Days Plus Bank Holidays”
Employees will usually be entitled to the additional bank holiday.
This is because the contract provides a holiday entitlement in addition to bank holidays. If an extra bank holiday is announced, employees will generally benefit from that additional day in the same way as any other bank holiday.
Where The Contract States “28 Days Including Bank Holidays”
Employees will not usually entitled to an additional day’s leave.
In this situation, the employee’s total annual leave entitlement remains 28 days and the employer can usually decide whether the additional bank holiday is taken from that existing entitlement.
However, employers should review the precise wording of the contract and consider any previous practice before making a decision.
Where The Contract Specifically Refers To “8 Bank Holidays”
Employees will not usually be entitled to the additional bank holiday.
If the contract specifies entitlement to eight bank holidays rather than referring more generally to bank holidays, the employer may not be obliged to grant the additional day as paid leave.
That said, employers should still consider the wider employee relations implications of their decision, particularly if employees expect to receive the day off.
Review The Contract Carefully
Small differences in contractual wording can have a significant impact on employee entitlement. Before making any announcement, employers should carefully review contracts of employment, holiday policies and any relevant collective agreements.
Where the wording is unclear, seeking professional advice can help avoid disputes and ensure employees are treated consistently.
Important: Employment contracts do not always fit neatly into these examples. Before making any announcement to employees about how an additional bank holiday will be treated, always review the contract wording. any relevant holiday policy and any relevant custom and practice arrangements. Changing position after an announcement has been made can be difficult and may damage trust and confidence.
Consider Employee Relations
Whilst contracts of employment will often determine the legal position, employers should also consider the employee relations impact of any decision relating to an additional bank holiday.
There will be occasions where employees are not contractually entitled to an additional day’s leave. However, a strictly legal approach may not always be the best commercial or employee relations decision.
Additional bank holidays are often linked to significant national events and employees may naturally expect to receive the day off. Refusing a request that employees believe is reasonable can sometimes have a negative impact on morale, engagement and goodwill, particularly where neighbouring businesses are taking a different approach.
Employers should therefore consider the wider implications of their decision, including:
- The expectations of employees
- The impact on employee morale and engagement
- Operational requirements and customer demand
- The cost of granting an additional day’s leave
- The approach adopted on previous occasions
Consistency is particularly important. If different groups of employees are treated differently, employers should be able to clearly explain the reasons for the distinction. Inconsistent decision-making can lead to complaints of unfair treatment and may damage trust within the workforce.
Ultimately, employers should seek to balance their contractual obligations, operational needs and employee expectations. In some cases, granting the additional day may be a relatively low-cost way of generating goodwill and demonstrating appreciation to employees. In others, operational requirements may mean that alternative arrangements are more appropriate.
Whatever decision is made, it should be communicated clearly and consistently to all affected employees.
How Should Employers Deal With An Additional Bank Holiday?
Where an additional bank holiday is announced, employers have several options available. The most appropriate approach will depend on the contractual position, operational requirements and the impact on employees and customers.
Whatever approach is adopted, employers should ensure it is applied consistently and communicated clearly to employees as early as possible.
Close The Business And Grant Paid Leave
Many employers choose to close their business and provide employees with an additional day’s paid leave. This is often the simplest option from an administration perspective and can generate significant employee goodwill, particularly where the additional bank holiday marks a major national event.
Before taking this approach, employers should consider whether employees are contractually entitled to the additional day and whether the business can accommodate the associated cost and operational impact.
Require Employees To Use Annual Leave
Employers may decide to close the business but require employees to use a day’s annual leave entitlement to cover the closure.
Where this option is chosen, employers should ensure they provide the appropriate statutory notice required under the Working Time Regulations and check that the arrangement is consistent with contractual terms and existing holiday policies.
This approach can allow employees to benefit from the additional bank holiday whilst avoiding the cost of granting an extra day’s paid leave.
Remain Open As Normal
Some businesses may decide to continue operating as normal. This is often the case where customer demand remains high, operational requirements make closure impractical or the contractual wording does not require employees to receive the additional day off.
Where employees are required to work, employers should communicate their decision clearly and explain how the additional bank holiday will be treated for holiday entitlement purposes.
Offer Enhanced Pay Or Alternative Time Off
Some employers choose to recognise the additional bank holiday by offering enhanced pay, time off in lieu or an alternative day’s leave to employees who are required to work.
Whilst there is generally no automatic legal requirement to provide enhanced pay for bank holiday working, doing so can help maintain goodwill and recognise the contribution of employees who continue working during a significant national event.
This option is particularly common in sectors where business operations must continue, such as healthcare, hospitality, logistics, retail and other customer-facing environments.
The right approach will vary from business to business. Employers should balance contractual obligations, operational needs, cost considerations and employee expectations before reaching a decision.
Additional Bank Holidays And Part-Time Employees
When an additional bank holiday is announced, employers should give careful consideration to how part-time employees will be treated.
One of the most common mistakes employers make is granting the benefit of an additional bank holiday to full-time employees whilst overlooking the impact on part-time workers. This can create fairness concerns and, in some circumstances, expose the employer to claims of less favourable treatment.
Part-time employees should not be treated less favourably than comparable full-time employees unless the difference in treatment can be objectively justified.
Pro-Rating Additional Bank Holiday Entitlement
Where an employer decides to grant an additional day’s leave, it is generally good practice to provide an equivalent pro-rated benefit to part-time employees.
For example, if full-time employees receive an additional day’s paid leave, part-time employees may receive a pro-rated amount of additional leave based on their normal working pattern.
This helps ensure all employees benefit fairly from the additional bank holiday, regardless of the days they normally work.
Avoiding Unfair Outcomes
Employers should be particularly careful where part-time employees do not normally work on Mondays, as many bank holidays fall on a Monday.
Without appropriate adjustments, employees who regularly work Mondays may receive a greater benefit than colleagues working the same number of hours across different days of the week.
Many employers avoid this issue by calculating annual leave entitlement in hours rather than days and including bank holiday entitlement within the overall calculation. This can provide greater flexibility and ensure holiday entitlement is distributed more fairly across the workforce.
Consistency And Fairness
Whatever approach is adopted, it should be applied consistently across the organisation and communicated clearly to employees. Managers should be able to explain how entitlement has been calculated and why the chosen approach is fair.
Taking time to consider the impact on part-time employees can help avoid disputes, maintain employee trust and demonstrate a commitment to treating employees fairly and consistently.
Communicating The Decision About An Additional Bank Holiday
Once a decision has been made regarding an additional bank holiday, employers should communicate it to employees as early as possible. Clear and timely communication helps employees make personal arrangements and reduces the likelihood of misunderstandings or disputes.
Additional bank holidays are often announced several months in advance, giving employers an opportunity to review contractual arrangements, consider operational requirements and determine the most appropriate approach for the business.
When communicating the decision, employers should explain:
- Whether the business will remain open or close
- Whether employees will receive an additional day’s paid leave
- Whether annual leave entitlement will be used
- Any arrangements for employees who are required to work
- How part-time employees will be treated
Consistency is important. Employees performing similar roles should be treated consistently unless there is a clear business reason for adopting a different approach. Where different arrangements apply to different groups of employees, the reasons should be communicated clearly to avoid confusion and maintain trust.
Employers should also ensure the decision is confirmed in writing. This may be through an email, staff announcement or other formal communication. Written confirmation provides clarity for employees and creates a useful record should any questions arise later.
By communicating decisions promptly, consistently and in writing, employers can minimise uncertainty and help ensure any additional bank holiday is managed smoothly.
Common Mistakes Employers Make When An Additional Bank Holiday Is Announced
Additional bank holidays do not occur often, which means many employers find themselves dealing with unfamiliar issues when one is announced. Unfortunately, misunderstandings can lead to confusion, employee relations problems and unnecessary disputes.
Some of the most common mistakes employers make include:
Assuming Everyone Is Automatically Entitled To The Day Off
Many employers assume that an additional bank holiday automatically means employees receive an extra day’s paid leave. In reality, entitlement will often depend on the wording of the employee’s contract of employment and any holiday policies that apply.
Failing To Check Contracts And Annual Leave Policies
Before making any announcements, employers should review contracts of employment and holiday policies carefully. Small differences in wording can have a significant impact on employee entitlement and failing to check contractual documentation can lead to costly mistakes.
Treating Employees Inconsistently
Applying different rules to employees in similar circumstances can quickly create employee relations issues. If different arrangements are necessary for operational reasons, employers should be able to clearly explain the rationale behind their decision.
Overlooking Part-Time Employees
Part-time employees are sometimes forgotten when additional bank holidays are announced. Employers should ensure any benefit provided to full-time employees is considered carefully for part-time workers to avoid less favourable treatment and maintain fairness across the workforce.
Making Last-Minute Decisions
Leaving decisions until the last minute can create unnecessary uncertainty for employees and make workforce planning more difficult. Employees often need time to make childcare arrangements, organise family commitments or plan annual leave. Early communication helps avoid confusion and ensures expectations are managed appropriately.
By reviewing contracts, considering employee relations implications and communicating decisions clearly, employers can avoid many of the common problems associated with additional bank holidays.
Consistency Matters
When an additional bank holiday is announced, employees are often less concerned about the specific decision made and more concerned about whether they are being treated fairly.
Employees are more likely to accept decisions about additional bank holidays where employers apply contractual terms consistently and communicate openly about the reasons for their approach.
Problems can arise when different employees receive different treatment without a clear business justification. For example, granting an additional day’s paid leave to one group of employees whilst requiring another group to use annual leave may lead to questions about fairness if the rationale is not properly explained.
Employers should therefore ensure that decisions are based on objective factors such as contractual entitlement, operational requirements and business needs rather than individual preference or managerial discretion.
Where different arrangements are necessary, the reasons should be communicated clearly and applied consistently across comparable groups of employees. Taking a transparent and consistent approach can help maintain trust, reduce employee relations issues and minimise the risk of disputes.
Ultimately, a well-explained decision that is applied consistently is far more likely to be accepted by employees than a decision that appears arbitrary or unfair.
How Kea HR Can Help
Additional bank holidays can create uncertainty for employers, particularly where contracts contain different holiday entitlement wording or where previous arrangements may have created employee expectations.
At Kea HR, we help employers understand their obligations, assess the risks and make practical decisions that balance legal compliance with employee relations considerations.
We can support your business with:
- Contract Reviews – reviewing holiday entitlement clauses and advising on how additional bank holidays may affect employee entitlement.
- Holiday Policy Reviews – ensuring annual leave policies clearly explain how bank holidays, company shutdowns and additional public holidays will be managed.
- Employee Handbook Reviews – identifying inconsistencies, updating outdated wording and ensuring your documentation reflects current employment law and best practice.
- Employee Communications – preparing clear communications to help explain decisions, manage expectations and reduce the risk of misunderstandings or disputes.
Whether an additional bank holiday has just been announced or you want to ensure your documentation is prepared for future events, we can help you put clear and consistent arrangements in place.
By reviewing your contracts, policies and employee communications in advance, you can avoid confusion, maintain employee trust and ensure any additional bank holiday is managed smoothly.
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