What Does ‘Inclusive Of Bank Holidays’ Mean In Employment Contracts?

If you’re hiring employees in the UK, sooner or later you’ll come across the phrase “inclusive of bank holidays” in employment contracts. At first glance, it might seem straightforward, but - as with many employment law details - those few words can have a big impact on your legal obligations, your employees’ entitlements, and your workplace culture.

Whether you’re drafting a new employment contract or reviewing existing ones, it’s crucial to understand exactly what “inclusive of bank holidays” means, what it covers, and how to ensure you’re both fair to your team and fully compliant with UK law. In this article, we’ll break down the legal basics, explore common scenarios, and offer practical guidance for employers so you can navigate bank holiday entitlements with confidence.

Keep reading to get clear answers, avoid common pitfalls, and ensure your employment agreements stand up to scrutiny.

What Does ‘Inclusive Of Bank Holidays’ Mean In An Employment Contract?

When you see a holiday entitlement described as “inclusive of bank holidays” in a contract, it means that the total annual leave specified includes public and bank holidays, rather than treating them as separate to the basic holiday allowance. In simple terms: your employee’s paid time off covers both their standard holiday days and all recognised bank holidays in one total number.

For example, if you offer 28 days’ holiday “inclusive of bank holidays”, and there are 8 bank holidays in England and Wales during the year, this means your employee can take 20 days off at a time of their choosing, with the other 8 days typically aligning with bank and public holidays. If your business operates on bank holidays or requires staff to work during them, the contract must clarify what happens: do staff get the day off, do they receive extra pay, or do they take time off in lieu?

It's a subtle phrase, but one with a big practical effect - especially when it comes to scheduling, pay, and staff expectations.

Are Employers Legally Required To Give Staff Bank Holidays Off?

Let’s clear this up: UK law does not require employers to give staff paid leave specifically on bank holidays. However, all employees are entitled to a minimum of 5.6 weeks' paid holiday per year (pro-rata for part-timers), which equals 28 days for someone working a standard five-day week.

This statutory entitlement can include or exclude bank holidays - it’s up to you as the employer. You just have to make sure the total leave adds up to at least the legal minimum. If your contract says “20 days plus bank holidays,” that’s usually 28 days. If it says “28 days inclusive of bank holidays,” the bank holidays are rolled into the total. Many businesses use the older wording of “20 days plus 8 bank holidays,” but the “inclusive of bank holidays” approach is increasingly common for clarity and flexibility.

For a rundown of the statutory rules, see our UK employment laws guide.

How Does ‘Inclusive Of Bank Holidays’ Affect Your Staff’s Time Off?

The way ‘inclusive of bank holidays’ is worded in a contract changes how (and sometimes when) your employees can take their leave. Here’s how it usually works in practice:

• Fixed-closure workplaces: If your business closes on bank holidays (e.g. offices, most schools), your workers are expected to use part of their total annual leave entitlement for those days, with the remainder for their personal holidays.
• Bank holiday work required: If your business stays open on bank holidays (think retail, hospitality, care), you can require staff to work those dates. But their allowance still only includes 28 days, and you need to decide whether to offer a substitute day off (time off in lieu) or extra pay.
• Booking leave: Employees shouldn’t be double-counted - if they work a bank holiday, they keep that day to take as leave at another time. Be clear about this in your absence and holiday policy.

It’s crucial to explain the approach in your contracts and communicate expectations clearly to avoid misunderstandings or disputes.

Example Scenarios: Inclusive Of Bank Holidays In Action

Let’s look at two archetypal UK employment contract setups to illustrate:

• Scenario A: The contract states, “You are entitled to 28 days’ holiday inclusive of public and bank holidays.” The business closes for all 8 bank holidays, so those days are counted as annual leave, leaving 20 days for the employee to take at their discretion. If they want Easter Monday off, it comes out of their total 28 days.
• Scenario B: The contract says, “You are entitled to 20 days’ holiday plus bank holidays.” Staff get their 20 days to book, plus every bank/public holiday as paid leave - assuming the company gives all those days off. In total, that’s 28 paid days off (or more if the contract includes additional discretionary days).

In both cases, the employee’s legal minimum is covered. But the flexibility of who books leave - and when - is different. This is why the phrase “inclusive of bank holidays” is so important to define in every contract.

Advantages Of The ‘Inclusive’ Approach For Employers

There’s a reason many UK employers opt for holiday entitlements “inclusive of bank holidays”:

• Simplifies holiday administration: Everyone’s annual entitlement is a clear set number, and you don’t have to adjust for differing numbers of bank holidays in Scotland, Northern Ireland, or when additional holidays are declared (e.g. a royal event).
• Manages expectations: You avoid confusion about whether bank holidays are extra or part of the standard allowance - staff can’t argue for double-dipping.
• Flexibility for shift-based or multi-location teams: If you have part-timers, shift workers, or operate across regions with different public holidays, rolling all holidays into a single entitlement is much easier to manage.
• Compliance with the law: As long as your total entitlement meets (or exceeds) the statutory minimum, you’re legally compliant.

But this only works well if you communicate it properly and spell it out in your contracts, staff handbooks, and written statements of particulars.

Potential Pitfalls To Watch Out For

Despite the clarity, the “inclusive of bank holidays” approach can cause disputes or headaches if:

• Your contract wording is ambiguous - if it’s not clear how many days are included or what happens if an employee is required to work a bank holiday, staff may assume they’re entitled to both.
• Staff have religious beliefs or special requirements - if someone wants a different day off for religious observance, or celebrates local rather than national bank holidays, you may have a duty to make reasonable adjustments or consider equality law issues.
• You forget about part-timers - the law says you can’t treat part-timers less favourably than full-timers, so their holiday (including bank/public holidays) must be pro-rated based on the hours they work.
• Scotland and Northern Ireland differences - Bank/public holidays vary by region. Standard contracts should explain which days are counted for staff in each location.
• Holiday accrual and leavers: If an employee leaves part-way through the year, or joins mid-year, make sure you calculate their entitlement (including the correct number of bank holidays) correctly in line with ACAS and government guidance.

Not sure if your contracts are watertight? It’s wise to get them checked by an expert. For more on writing effective staff policies, see our absence from work policies guide.

How Should Employers Draft ‘Inclusive Of Bank Holidays’ In Contracts?

To avoid confusion (and potential legal risk), an employment contract using the ‘inclusive of bank holidays’ approach should:

• Clearly state the total number of paid holidays per year (e.g. 28 days).
• Make plain that this includes all recognised bank and public holidays (name the regions covered if relevant).
• Set out whether employees will be required to work on bank holidays, and if so, whether they get a substitute day off or enhanced pay.
• Explain how leave is pro-rated for part-time or irregular workers.
• Address what happens if there are extra bank holidays declared in a year (is the entitlement capped, or does it flex?).
• Reference your wider company policies on booking time off, authorisation, and handling requests for alternative holidays.

If you’re not sure your contract covers all these bases, our team can review and upgrade your employee contract terms for compliance and clarity.

Best Practices For Managing Holiday Entitlement ‘Inclusive Of Bank Holidays’

Setting up contracts correctly is just the first step. Here are a few key tips to manage holiday entitlement smoothly in practice:

• Share expectations up front: Be clear in job ads, offer letters, and induction about how holidays are counted and when your business is closed.
• Keep a transparent leave calendar: Especially if you require cover on bank holidays, so no one’s confused about whether they’re in or out.
• Use reliable payroll/HR systems: This minimises risk of errors in leave accruals or payments, which can otherwise trigger complaints or even tribunal claims.
• Update policies if government declares extra holidays: For example, for royal events or national emergencies. Decide in advance whether extra days are included or offered in addition.
• Document everything: Keep accurate records of leave taken, especially where staff swap shifts or work on public holidays in exchange for another day off later (known as time off in lieu, or TOIL).

A well-managed leave policy can boost employee morale and help you avoid costly disputes, so it’s worth getting this right from the start.

What If Employees Work On Bank Holidays?

If your operations require staff to work on bank holidays, your contract should clarify what happens:

• Will employees get a substitute day (time off in lieu)? For those on “inclusive of bank holidays” contracts, if they work the bank holiday itself, that day should be added back into their leave entitlement to take at a later time.
• Will there be extra pay? There’s no legal requirement to pay extra for bank holidays, unless this is promised by contract or workplace custom. But many employers offer a higher rate as an incentive, which can be a good selling point for tough-to-staff shifts.
• What systems do you have to track time off in lieu (TOIL)? Make sure it’s clear and well-documented so leave is properly managed and disputes are avoided.

If these details aren’t spelled out, you risk accidental underpayment or confusion over leave records. For more on employer holiday management rights, see our detailed guide.

Are There Differences Between England, Scotland, Wales, And Northern Ireland?

Yes! Bank and public holidays differ by region. There are:

• England & Wales: 8 bank/public holidays per year (including Christmas, New Year, Good Friday, Easter Monday, and the various bank holidays in May and August).
• Scotland: different bank/public holidays, often 9 per year - some banks observe additional days; local custom may differ from the standard list.
• Northern Ireland: 10, including two unique religious holidays.

Make sure your contracts either list which days are counted or reference a recognised external list (such as the UK Government’s published bank holidays for that year) so it’s clear for staff in different locations or those who work for you remotely.

Is It A Problem If Your Contract Is Vague Or Outdated?

Vague, ambiguous, or inconsistent holiday clauses can land employers in hot water. The risks include:

• Disputes over when leave can be taken or what happens if someone is scheduled/volunteers to work a bank holiday.
• Overpayment or underpayment if payroll/HR use the wrong formula to calculate entitlements for leavers or joiners part-way through the year.
• Employment tribunal claims if an employee believes they’ve received less than their statutory minimum leave or been unfairly treated compared to colleagues.

Set a reminder to regularly review and update your employment contracts, with support from a legal expert where needed. This ensures your documents reflect current law, business practices, and keep your team happy and informed.

Key Takeaways

• “Inclusive of bank holidays” means total holiday entitlement includes all bank and public holidays - staff do not get them on top of the stated allowance.
• Employers are not legally required to give staff paid bank holidays, but they must provide at least 5.6 weeks (28 days for a full-timer) paid holiday per year, including or on top of any bank holidays.
• Be clear in your contracts, staff handbooks, and policies about how bank holidays are treated, what happens if employees work those days, and how holiday entitlements are pro-rated for part-timers or shift workers.
• Reference regional differences in bank/public holidays if your team is spread across the UK.
• Vague or unclear contract wording can lead to disputes, errors in pay, and even employment tribunal claims. Get your documents reviewed for clarity and legal compliance.

If you’d like expert support drafting or reviewing your employment contracts and holiday entitlement wording, we’re here to help. You can contact us at team@sprintlaw.co.uk or call 08081347754 for a free, no-obligation chat about getting your legal foundations right from day one.