But a worker may have a greater entitlement under his or her contract of employment (contractual leave). One type of leave is set off against the other, so statutory leave is usually counted within any contractual leave entitlement.

Under the regulations, the right to four week's leave is not additional to public holidays.

Public holidays can be included as part of a worker's statutory annual leave entitlement. As part of its election campaign, Labour pledged to ensure that public holidays would be given in addition to the four weeks' statutory leave, if it secured a third term in government.

There is a wide entitlement to statutory holiday leave.

The regulations apply not just to "employees" but to a wider category of "workers".

However, the genuinely selfemployed are excluded.

The law has something to say on when a holiday leave year begins. A holiday leave year can start on any date in the year agreed between the worker and employer. If there is no such agreement, the holiday year will begin on October 1, 1998, and its subsequent anniversaries, for those who started work on or before that date.

If the worker commenced employment after October 1, 1998, then the holiday leave year will start on the date the worker started work for the employer.

Part-time workers are not excluded from the legislation and so should have an appropriate pro-rata entitlement to holiday. If a full-timer gets paid for bank holidays in addition to their statutory leave, then parttimers are entitled to a pro-rata entitlement.

Where a worker begins work after the start of the employer's holiday leave year, the worker's holiday entitlement will be proportionate to the amount of the leave year remaining. If a worker leaves before the end of the leave year their annual leave entitlement is pro-rated to the proportion of the leave year that they have worked.

First day of employment

A worker's entitlement to paid statutory annual leave begins on the first day of employment.

Only workers in their first year of employment are said to "accrue" their statutory holiday leave. All other workers, subject to giving appropriate notice, can take leave at any point in the holiday year without first having to "accrue" it. During the first year of employment, an employer can use an accrual system, whereby, the portion of the leave which may actually be taken builds up over the year.

The law says that a week's leave should allow the worker to be away from work for a week. So leave is the same length of time as they work in a normal week.

The regulations allow employers and workers to agree their own arrangements for taking leave. These are usually provided for in the contract or other company documentation. In the absence of any agreed procedure, the regulations provide that a worker may be required to take all or any of their leave under the regulations at specified times provided that prior notice is given by the employer.

The notice from the employer should be at least twice as many days as the number of days' leave to be taken.

Under the regulations, a worker can also give notice of when they wish to take leave.

Again, the notice period should be at least twice the period of the leave to be taken. The employer may refuse the worker permission to take such leave.

There is a misconception about carrying over holiday leave year. Statutory leave cannot be carried over to the next leave year. It must be taken in the current leave year.

So for example, leave for a holiday year commencing January 1, 2005 must be taken before December 31, 2005.

Employers can make separate arrangements to carry over contractual leave in excess of the statutory minimum, if they wish to do so. Where carry over of contractual holiday entitlement is allowed, employers will generally impose a time limit on when the carried over leave should be taken.

Week's pay for week's leave

There is a legal basis for calculating a week's pay.

Workers are entitled to receive a week's pay for each week's leave. For those with normal working hours (ie the number of hours fixed by their contract), a week's pay is the amount that they would earn for a normal working week.

Overtime, unless it is contractually guaranteed overtime, is not included.

Commission payments may also be excluded from holiday pay calculations, depending upon how the employee's remuneration is structured.

If a worker does not have normal working hours, a week's pay is calculated by reference to his average pay over a 12 week period.

Employers need to be careful about rolling up holiday pay into basic salary. Any rolled up holiday pay arrangement must ensure that there is mutual agreement between the worker and employer for genuine payment for holidays, which represents a true addition to the contractual rate of pay for the time worked.

An employer cannot pay a worker in lieu of holiday entitlement under the regulations unless the worker's employment is terminated. This does not, however, prevent employers and workers from agreeing to a payment in lieu for untaken contractual holiday entitle-ment over and above the four week entitlement provided for in the regulations.

In the case of terminated employment, the regulations set out how to calculate a payment in lieu of accrued but untaken statutory holiday. The statutory formula basically deducts the amount of leave he has already taken from the worker's entitlement.

If a worker has taken more holiday during the leave year than he has accrued up to his termination date, then employers often deduct such payments from the final pay cheque.

An employer will only be able to do this where there is an agreement between the worker and employer to do so.

At the end of the day, under the regulations, the right to paid holiday is enforced through the employment tribunals. Usually, complaints must be presented within three months of the date on which it is alleged that the leave should have been begun.

Where a complaint is upheld, the tribunal will make a declaration to that effect and may award compensation to the worker.

Gareth Edwards is an associate solicitor and Michelle Chamberlain is a practice support lawyer in the Eversheds Human Resources Group.