What is a government holiday?

In the UK, a government holiday is usually known as a ‘bank holiday’. The name refers to the fact that financial institutions tend to close during these public holidays. Government and school buildings also tend to close during these periods as well.

Public holidays are usually based around a day of cultural celebration but a bank holiday is a holiday by UK government law. As banks close during bank holidays, it is customary for UK businesses to also close and allow their employees to take this time off. 

During some bank holidays, there are also restrictions on trading. This applies to Easter and Christmas Day in England and Wales. For Scotland, both New Year’s Day and Christmas Day have trading restrictions. 

List of holidays that fall on a day off

In this section, we look at which holidays and celebrations are considered bank holidays in the United Kingdom. As these occasions fall on a bank holiday, this means that they are typically offered as paid time off to employees. Here is the list of holidays that fall on a bank holiday:

• Christmas Day
• Boxing Day
• Good Friday
• Easter Monday (for England and Wales only)
• New Year’s Day (for Scotland only)

If a bank holiday falls on a weekend, then a weekday becomes a substitute bank holiday. This is typically on the Monday after the weekend.

Occasions that aren’t considered bank holidays

In the UK some special occasions or religious observances are not considered as bank holidays. This means that employees aren’t generally given these days off as part of their paid leave, unless they request it. These occasions may still be important to an employee’s cultural identity or religious practice. 

Therefore, businesses may consider celebrating or participating in them in the workplace. Some occasions that aren’t considered bank holidays in the UK include:

• Valentine’s Day on the 14th February
• St Patrick’s Day on the 17th March
• Eid al-Fitr, the Muslim festival which marks the end of Ramadan (begins on the first day of Shawwal in the Islamic lunar calendar)
• The Jewish holiday Hanukkah (begins on the 25th day of Kislev in the Hebrew calendar).

While these occasions aren’t considered bank holidays in the UK, they may still fall on a bank holiday. This is because with some celebrations the date they fall on changes each year. Ramadan is one example, as the celebration period follows a lunar calendar rather than the Gregorian calendar that the UK government uses for bank holidays.

Similarly, the Hebrew calendar is lunisolar, meaning that the first day of Hanukkah falls on a different day each year. Because Hanukkah tends to fall in November or December, the first day of Hanukkah can fall on Christmas Day. This means that despite Hanukkah not being considered a bank holiday in the UK, some years it may coincide with the Christmas Day bank holiday.

How paid holidays benefit your business

Employees are entitled to 5.6 weeks of holiday a year, which means that employers are legally obliged to allow them to take this time off. However, paid holidays are beneficial to employers as well as their staff. Allowing paid time off can have psychological benefits for employees. For example, allowing employees to take time off to rest and recharge can help boost their productivity and engagement upon returning to work. 

Paid time off and work wellbeing

Paid time off can therefore benefit your business, as companies who invest in wellbeing at work also see higher valuations, return on assets and better profits.  Work wellbeing is therefore increasingly seen as a business imperative rather than a nice-to-have, with wellbeing helping employees to become resilient and resistant to stress.

Employers rate ‘foundational needs’ such as fair pay, flexibility and trust as key drivers of employee wellbeing. By providing foundational needs such as fair holiday pay, employers can better attract and retain talent. Furthermore, by offering transparency in general around pay, employers can also help foster an environment of trust.

Unlimited holiday pay

Businesses may look at providing their employees with unlimited paid holiday as a perk. A reported 50% of employees took fewer sick days when they were offered unlimited paid holiday, as well as a 10% drop in staff turnover. However, one consequence of introducing these policies is that conscientious employees may be less inclined to take time off. Therefore, employers may wish to consider if unlimited paid holiday policies are right for their business. 

Which holidays might you like to consider giving as paid days off?

Employees receive 5.6 weeks of statutory holiday a year. Some employers choose to include bank holidays in an employee’s statutory pay, while others offer bank holidays on top of their paid holiday entitlement. According to the UK government, employees are entitled to 5.6 weeks of paid statutory holiday, even if they work during bank holidays. For more information on statutory holidays, please visit the UK government website.

Paid time off and employee contracts 

In employee contracts, consider outlining whether they receive bank holidays as part of their paid holiday entitlement. It can be important to make this clear, as some employers choose to offer bank holidays as an additional holiday on top of an employee’s paid holiday entitlement.

Can businesses make employees take bank holidays as paid time off?

Employers can sometimes make employees take a bank holiday off as paid leave. For instance, if a business doesn’t open during a bank holiday, then the employees’ time off can be deducted from their holiday entitlement. In this case, however, employers may state this in the employee’s contract. They can also give employees notice that the day will be taken off as part of their entitlement.  

Businesses tend to close for the duration of a bank holiday period. This means that employees are generally encouraged to take them as paid time off. It’s useful for employers to familiarise themselves with the rules surrounding statutory paid time off, particularly when it comes to paying employees for bank holidays. While most businesses close on bank holidays, some may encourage employees to work during this time but instead accommodate employees with additional pay or a substitute day off. Finally, businesses can strongly benefit from offering paid time off, as this can have a positive impact on an employee’s wellbeing and thus long term success.