No big bonfire for holiday regulations

Managers on the look-out for changes in employment law following Brexit need to prepare for new holiday entitlement and pay calculations.

The Retained EU Law (Revocation and Reform) Act 2023 became law in June, setting out how EU-based laws are to be treated in future.

Most employment law will continue to stand, giving employers some certainty, but one immediate priority for reform is the calculation of holiday entitlement and pay, as the Government is keen to simplify calculations.

Under current regulations, most people are entitled to 5.6 weeks of holiday a year, or the equivalent pro rata, made up of four weeks of EU regulated leave and 1.6 weeks of domestic regulated leave.

Problems arise because the two entitlements have different rules for calculating pay. For the four weeks of EU leave, calculations must include bonus or overtime payments, and generally this cannot be carried over into a new holiday year.

But under the domestic provision, only basic rate payment is required for the 1.6 weeks of holiday pay, and this holiday can be carried over with written agreement.

We don’t know yet whether the government will decide that all pay should be at full rate for the whole 5.6 weeks, including payments such as bonuses, commissions and overtime, or at the basic rate.

Unfortunately, one side or the other is likely to be disappointed. Employers may be focused on the potential burden of additional costs if the calculation results in an uplift, but equally there may be staff disputes if the outcome translates as less in pay packets.

The other proposal to simplify holiday pay is by using rolled-up holiday pay, by which workers receive their holiday pay every working week through an extra percentage on top of their earned pay, instead of when they take time out for holiday. Presently, this is not allowed and holiday pay must be paid when taken.

On the positive side, some employers may find that this could simplify holiday calculations for irregular hours but, if implemented, it will require contracts and payslips to be updated.

The other issue with rolled-up holiday pay is that can lead to workers not taking time out because they struggle to budget for holiday times without income. This can have a negative effect if workers suffer stress and burnout through a lack of downtime, so it may require a system to ensure everyone takes their annual leave.

To discuss this, or any other related matter with Jane or a member of her team, please call us, start a live chat or email us at

*This is not legal advice; it is intended to provide information of general interest about current legal issues.


Jane Crosby

Partner, Head of Dispute Resolution & Accredited Mediator

Jane is a Partner based in the Guildford office and she is also Head of the Dispute Resolution team here at Hart Brown. Jane specialises...

Jane Crosby -Head of Dispute Resolution

Partner, Head of Dispute Resolution & Accredited Mediator

Jane Crosby

Jane is a Partner based in the Guildford office and she is also Head of the Dispute Resolution team here at Hart Brown. Jane specialises in employment Law and commercial litigation and brings more than 15 years' experience to her role.

Prior to entering the legal profession, Jane was employed in the aviation industry. This experience is appreciated by many of Jane's clients who note that she is able to take a commercial and pragmatic approach to any legal issue that they face.

Jane acts for a wide range of individuals and businesses and her areas of specialism include aviation, property related industries and IT. Jane regularly advises on aspects of employment law, such as settlement agreements, employment contracts, policies and procedures, redundancies, equal pay, data protection, issues arising from TUPE and reorganisations, the calculation of holiday pay, bonus and commission payments, disciplinary and grievance issues, dismissal and termination issues, the protection of confidential information and the enforcement of restrictive covenants. Jane gets involved in GDPR training for her clients and she is able to deliver tailored employment law training sessions upon request.

As a commercial litigation lawyer, Jane also deals in shareholder and directors disputes, commercial contract disputes and the enforcement of restrictive covenants.

Jane has been involved in successful high value commercial litigation for clients in the High Courts, she is an accredited mediator and she is a member of the Employment Lawyers Association.

Jane is often asked to write for a number of well known publications, including The Daily Mail, The Telegraph and The Week and she has been interviewed on BBC Radio 4.

Here is small selection of the feedback that Jane has received:

“Jane, I cannot sincerely thank you enough for your wise counsel and am delighted to have made your acquaintance. If I am blessed with a new position somewhere I will hand over my contract in the first instance to you. Likewise, any of my friends, peers, romans and countrymen wanting advice, I will point them in your direction.”

“Jane, you have been most resilient on my behalf for which I sincerely thank you for all your endeavours. I have a tremendous working relationship with Hart Brown and you have undoubtedly compounded this further."

“I appreciated the clarity of advice given at a stressful time”.

“A sensitive and highly professional approach and efficient work in the interests of the client”.

“Your advice, conduct and assistance have been indeed outstanding and very professional but also – and most importantly – very humane”.