If your holiday year runs from 1 April to 31 March, the timing of Easter can have a significant impact on your employees’ holiday entitlement. In 2027, the Easter weekend falls very early on Friday 26 March to Monday 29 March 2027.
As a result:
- The 1 April 2026 – 31 March 2027 leave year will have 10 public holidays in it rather than the usual eight.
- The 1 April 2027 to 31 March 2028 leave year will only have six public holidays.
These fluctuations can create challenges for employers in how to ensure that employees still get their minimum statutory holiday entitlement, whilst at the same time avoiding higher employment costs and managing employee expectations.
What is an Employee’s Minimum Statutory Holiday Entitlement?
Under the Working Time Regulations (WTR), workers are entitled to 5.6 weeks’ annual leave, equivalent to 28 days for employees working a five-day week. This entitlement does not need to include bank holidays (though for many employers it will).
Are You Compliant?
Contracts of employment giving 28 days’ leave inclusive of public holidays
If your employees’ contracts of employment give 28 days’ leave inclusive of public holidays, you will still be compliant with the WTR in both leave years, despite the fluctuation in the number of public holidays.
However:
- During the 2026/2027 leave year, employees will automatically use 10 days of their entitlement on public holidays, leaving 18 days to take when they choose.
- In the 2027/2028 leave year, only six of their days will fall on bank holidays so they will need to book 22 days themselves to ensure they take their full 28‑day entitlement.
What actions should you take?
- Notify employees early to help them manage their leave.
- Ensure managers are aware of the imbalance, to avoid them authorising leave in excess of an employee’s entitlement.
Could there be any other knock-on impacts?
In the 2026/2027 leave year, the higher number of public holidays reduces the flexibility employees have in choosing when to take time off. As a result, some employees might need to look to alternative forms of leave, such as statutory parental leave, unpaid leave, time off in lieu (where applicable), or other contractual leave arrangements, to meet their personal or family needs, for example, to cover school holidays.
Clear, early communication will help employees understand their options and manage their leave effectively.
Contracts giving 20 or 21 days’ leave plus public holidays
Where contracts give 20 or 21 days’ leave plus public holidays, the reduced number of public holidays in the 2027/2028 leave year may mean employees receive less holiday than the statutory minimum.
If contracts have 22 days or more plus public holidays, you will still be compliant, as they will have 28 days in total.
What actions should you take?
If your contracts state 20 or 21 days’ leave plus public holidays, you will need to:
- Increase leave entitlement on a one-off basis for the 2027/2028 leave year; or
- Amend contracts to prevent future issues by:
- expressing holiday entitlement as 28 days inclusive of public holidays or a day in lieu if they are required to work on a public holiday; or
- moving the leave year so it does not coincide with Easter.
Can we not offset the 2026/2027 leave year against the 2027/2028 leave year?
Whilst employees will have less leave in the 2027/2028 leave year and will have extra leave in the 2026/2027 leave year, you cannot offset this extra leave against future leave years, as each is looked at in isolation.
Businesses should therefore consider the operational impact of the additional leave and if the changes outlined above are desirable to avoid the issue recurring.
Temporary Increase
If you choose to top up the reduced number of bank holidays falling in the 2027/2028 leave year by providing additional “standard” leave on a one-off basis, it is essential that this is:
- clearly documented; and
- explained to employees in writing.
Failure to do so may allow employees to argue that the increased allowance has become an implied term of their employment contract and seek to claim the increase in future years.
Changing Terms and Conditions of Employment
Guidance on changing terms and conditions can be found in the following articles:
How to change contracts of employment
Is there still a place for firing and re-hiring?
If you intend to change the holiday year as part of this process, you will need either:
- a shortened (“miniature”) holiday year to bridge the gap; or
- an extended holiday year.
Example:
To move from a 1 April start to 1 May start, you would require either:
- a miniature holiday year from 1 April to 30 April 2026; or
- an extended year running from 1 April 2026 to 30 April 2027.
In all cases, you must review the cumulative holiday entitlement to ensure WTR compliance and consider whether any specific carry‑over provisions are necessary.
If you require further advice or assistance in ensuring compliance with the WTR or navigating holiday year changes, our Employment Team would be happy to help.