After 1 April 2007 all employees will be entitled to four weeks annual leave from the anniversary date of their starting work.

If an employee leaves after 1 April 2007 and before the next anniversary of their starting work, they will be entitled to 8% holiday pay back dated to their last anniversary.

Example: (1)  Employee A who joined on 15 April 2004 and finishes on 10 April 2007… is entitled to 8% holiday pay from 15 April 2006 until 10 April 2007.

Example: (2)  Employee B who joined on 30 March 2004 and finishes on 10 April 2007… is entitled to 8% holiday pay from 30 March 2007 until 10 April 2007.

An important anomaly to note … If employee B stays at work … they only become entitled to four weeks leave on 30 March 2008, whereas employee A who started work two weeks later is entitled to four weeks leave on 15 April 2007 (almost one year earlier).

If you have set a fixed date to measure the holiday anniversary for all employees (often done to coincide with an end of the year closedown) then the date fixed is the relevant anniversary date, not the actual day the employee started work.

Practical point on budgeting … Employers need to be accruing four weeks annual leave from anniversary dates after 1 April 2006 for all employees, and not waiting until 1 April 2007 to make that provision.