The Government has published proposals to increase workers' minimum holiday entitlement from 20 days per year to 28. This means that up to six million workers would benefit from an extra eight days holiday each year under the plans. Some employers currently include the eight bank holidays as part of workers' 20-day annual leave entitlement (pro-rata for part-timers).
The cost to business is expected to be around £4 billion per year. This represents around 0.4% of the wages bill. The cost of absenteeism in the workplace in the UK is currently estimated to be about £11.6 billion a year.
The Department of Trade and Industry (DTI) is launching a second public consultation on the implementation of the changes. Statutory annual leave entitlement would be increased in two stages, rising from 20 to 24 days on 1st October 2007, and from 24 to 28 days on 1st October 2008.
An increase would move UK workers' annual leave entitlement closer to that of workers in other European countries, where holiday allowance is typically more generous. Compared with the current minimum allowance of 20 days in the UK, for example, workers in Ireland are entitled to 29 days; the highest minimum entitlement is in Austria at 38 days.
Research by the DTI found that groups standing to benefit most from the changes include women, part-time workers, low-paid workers and workers from minority ethnic communities.
"Most companies already recognise that good holiday provision makes good business sense. Holiday entitlement can be a key factor in recruiting and retaining staff. Holidays are also important for productivity as they help minimise sick leave and keep people motivated and refreshed."
Editor, TaxationWeb News