Payment for Leave and Holidays in Final Pay

Employees who are leaving their employment for any reason (e.g. by resignation, retirement, redundancy, dismissal or completion of fixed term) usually get their final wages and holiday pay on their last day of work, but may be paid it in their pay for the final period of their employment.

Public Holiday Entitlements That Might Happen After the Employment Has Ended

There is a rule that employees are sometimes entitled to be paid for public holidays that fall after their employment has ended (i.e. after their termination date). This can happen if the employee has unused annual holidays that they are entitled to at the time their employment ends. This rule doesn’t apply to employees who haven’t completed 12 months’ service because they haven’t become entitled to annual holidays yet.

How to Work Out Whether an Employee is Entitled to Public Holiday Payments after their Employment Has Ended:

1.) Treat any remaining annual holidays that the employee is entitled to as if the employee had taken them immediately after the date their employment ended.

2.) The employee must be paid for a public holiday if:

  • it happens within the time period created by adding on these remaining annual holidays to the end of  employment, and

  • it happens on a day that the employee would have worked if they were still employed, and the day was not a public holiday

3.) If the employee is entitled to be paid for a public holiday then:

  • the period that the annual holiday covers is extended by one day for each public holiday the employee is entitled to be paid for, and

  • this new extended period may contain more public holidays which also need to be considered for payment

The payment for any public holiday is calculated in the usual way. They are paid at the rate of relevant daily pay pr average daily pay (if applicable) for the day.

This situation has no effect on the actual end date of employment.

Click here for more information and some example scenarios.