Christmas shutdown 2026: can you make staff use their holiday?

If your business closes between Christmas and New Year, you can usually require employees to use some of their paid holiday entitlement for the days they would otherwise have worked.

The important point is notice. Give too little notice and you may not be able to require employees to take the holiday.

The notice rule

Under the Working Time Regulations 1998, an employer can require an employee to take holiday on particular days, provided the employer gives notice of at least twice the length of the leave being required, plus 1 day.

For example:

• 4 days' holiday requires at least 9 calendar days' notice

• 5 days' holiday requires at least 11 calendar days' notice

• The instruction should be clear about the dates the employee is required to take as holiday

The contract can contain different rules about how and when holiday can be required, so check your employment contracts first. Some contracts specifically allow the employer to close the business over Christmas and require employees to reserve holiday for the closure.

The 2026 Christmas dates

In England and Wales, Christmas Day is Friday 25th December 2026.

Boxing Day falls on Saturday 26th December, so the substitute bank holiday is Monday 28th December.

New Year's Day is Friday 1st January 2027.

In Scotland, the 2nd January bank holiday falls on a Saturday, so the substitute bank holiday is Monday 4th January 2027.

Example: closing from 24th December to 1st January

If a business closes from Thursday 24th December 2026 to Friday 1st January 2027, an employee who normally works Monday to Friday would have four working days during the closure that are not bank holidays:

• Thursday 24th December

• Tuesday 29th December

• Wednesday 30th December

• Thursday 31st December

If those four days are to be taken as annual leave, the employer would normally need to give at least 9 calendar days' notice.

For this example, the latest date to give the required notice would be Tuesday 15th December 2026.

Giving notice earlier is sensible, particularly because employees may already have made holiday arrangements.

What about the bank holidays

There is no general legal right to have bank holidays off, and there is no automatic legal right to extra pay for working one. What happens depends on the employment contract.

Bank holidays can be included within an employee's statutory 5.6 weeks' annual leave entitlement (28 days for someone working five days a week).

For example, if a contract says an employee receives 28 days' holiday including bank holidays, bank holidays that fall on days the employee would normally work can form part of that entitlement.

If the contract gives 28 days' holiday plus bank holidays, the position is different because the bank holidays are additional to the 28 days.

Always check the wording of the contract before telling employees how much holiday they must use.

Part-time employees

Part-time employees must receive holiday entitlement on a pro rata basis compared with comparable full-time employees.

The calculation should be based on their working pattern and entitlement rather than simply assuming that every employee gets 28 days.

For example, an employee who works three days a week would generally have a minimum statutory entitlement equivalent to 16.8 days a year where the full-time comparator works five days a week.

If bank holidays are included within the holiday entitlement, make sure the arrangement does not disadvantage part-time employees because they do not normally work on the days on which bank holidays fall.

New starters

During the first year of employment, statutory holiday entitlement generally builds up through the leave year, subject to the statutory rules for calculating entitlement.

If a new employee does not have enough holiday built up to cover a Christmas shutdown, decide how you will deal with the situation before announcing the closure.

Possible approaches include:

• Allowing the employee to take holiday in advance

• Agreeing unpaid leave

• Giving the employee paid time off where the business chooses to do so

Do not simply deduct the cost of unearned holiday from an employee's wages. Deductions from pay for holiday taken in excess of entitlement generally need to be supported by the employment contract or another written agreement.

Irregular-hours and part-year employees

Special holiday rules apply to irregular-hours workers and part-year workers for leave years beginning on or after 1st April 2024.

For these workers, statutory holiday entitlement is generally calculated at 12.07% of the hours worked in each pay period.

There are additional rules about when the entitlement is built up and how holiday pay is calculated, so do not automatically apply the same calculation used for a full-time employee.

Check the employee's individual holiday record before including them in a Christmas shutdown.

What employers should do now

Before announcing your Christmas closure:

• Check the employment contracts for any Christmas shutdown or compulsory holiday provisions

• Confirm the exact closure dates

• Identify which closure days would normally be working days

• Check each employee's holiday entitlement and remaining balance

• Consider different working patterns, particularly for part-time, irregular-hours and part-year employees

• Give the required notice if you are requiring employees to use holiday

• Deal with employees who do not have enough holiday before the closure is announced

• Put the arrangements in writing so everyone knows exactly which dates are affected

The SignalHR holiday calculator can help employers work out holiday entitlement for different working patterns, including part-time employees and new starters.

If you are unsure whether a particular employee can be required to take holiday during a shutdown, check the employment contract and the current statutory rules before making the instruction.