Is another bank holiday a good thing for businesses?

Amid calls to make this year’s extra day a permanent fixture, People Management takes a look at what a ‘Thank Holiday’ would mean in practice

Photo credit: Thana Prasongsin/Getty Images

Business groups have joined calls for the government to introduce a new bank holiday called ‘Thank Holiday’, campaign group Together has said.

Earlier this week, firms such as the Confederation of British Industry (CBI), Social Enterprise UK and UK Hospitality signed an open letter to prime minister Boris Johnson and chancellor Rishi Sunak requesting that this year’s extra bank holiday, put in place to celebrate the Queen’s Jubilee, be made permanent from 2023 onwards.

The letter said the holiday would "provide a moment every year for individuals and communities to come together, to thank those who have contributed in ways big and small to making our country a better place to live".

How businesses should manage bank holidays in 2022

Majority of businesses implementing four-day week, report finds

Is unlimited holiday an effective workplace benefit?

However, Johnson’s spokesperson told the Guardian that the 3 June holiday is a “unique” event, and added: “I’m not aware of any plans to make it permanent” but did say it would be kept under review.

The spokesperson also said each bank holiday “presents a considerable and significant cost to our economy and therefore each proposal would have to be considered carefully on that basis”.

According to Together, which organised the letter, research it commissioned from PwC found that the government’s existing figures overestimated the potential cost of a new bank holiday by 64 per cent and that it did not account for positive social and health benefits that were not captured by GDP figures.

Get more HR and employment law news like this delivered straight to your inbox every day – sign up to People Management’s PM Daily newsletter

But would another bank holiday be good news for firms in practice? Rachael Knappier, director of service at Croner, warned that “while at face value it may seem like a great initiative, in reality it could cause a headache for employers and their HR teams”.

She explained that, if another bank holiday were approved, employers will have to consider how the extra day will work in practice. 

“There is no automatic right to additional paid holiday above the statutory minimum of 5.6 weeks (28 days) per year,” she said. “As such, businesses could refuse to provide this, although they should keep in mind the impact it might have on employee relations.”

Knappier added that employers will have to review the wording of their employment contracts to understand employees’ entitlements to paid leave, and so their contractual obligations. 

However, she also advised that, because “employers are struggling with high absence levels and unmotivated workforces”, an extra paid day of leave each year could be an “effective morale boost” while also helping improve the economy post-Covid. 

Louise Aston, wellbeing director at Business in the Community, agreed that a new bank holiday would be beneficial for employees.

“Given the poor state of the nation’s mental health and all that we have gone through in the past two years, a day every year for individuals and communities to come together to thank those who have contributed efforts to support their communities, is most welcome,” she explained, highlighting that it could provide both the social and economic stimulus.

This was echoed by Alex Till, chair of the National Enterprise Network (NEN), who said the organisation "would be a strong supporter of 'Thank Holidays' being adopted across the sector, and would encourage SME owners to consider this for the wellbeing of workers.”

He explained that business owners know the value of their staff, but frequently don't have the cash flow to show their gratitude through salary rises or bonuses. 

Instead, Till said that “being able to recognise and reward staff through 'Thank Holidays' would be a great way for small business owners to give their hardworking teams a boost”.