Historical Context of Holiday Pay Legislation

The evolution of holiday pay legislation in the UK traces back to the Holidays with Pay Act of 1938, which initially entitled only a small subset of workers to paid annual leave. The repeal of this act in 1975 left holiday pay largely dependent on employment contracts, until the introduction of the Working Time Directive in 1993. This directive mandated four weeks of paid annual leave for workers, leading to the implementation of the Working Time Regulations in 1998 under the New Labour government. Notably, this legislation gave rise to significant complexities regarding how holiday pay should be calculated, especially concerning overtime payments.