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The United Kingdom is known for its numerous public holidays, commonly referred to as ‘bank holidays’. These holidays often prompt questions about their legal implications for both businesses and employees. What are the legal obligations of businesses during bank holidays? Are they required to close? What rights do employees have, and what special regulations, if any, come into play? This blog post aims to explore these questions in detail.

Are Businesses Required to Close?

Contrary to popular belief, there is no legal obligation for all businesses to close on a bank holiday. The decision to open or close is generally at the discretion of the business owner. However, some industries, such as financial services, often close in observance of these holidays. It’s crucial to review any industry-specific regulations and local bylaws that may require your business to close.

Retail businesses may be subject to Sunday trading laws on certain bank holidays, depending on the jurisdiction within the UK. For example, in England and Wales, larger shops (over 280 square metres) can open on bank holidays as if they were Sundays, but they may be limited to six hours of trading. Scotland and Northern Ireland have different regulations, so it’s important to consult local legislation.

Employee Rights and Compensations

Paid Leave

There is a common misconception that employees are automatically entitled to a day off on bank holidays, which is not the case. Whether an employee gets the day off depends on their employment contract. Some contracts specify that employees are entitled to public holidays off, while others incorporate these days into the employee’s statutory annual leave.


Employees who work on a bank holiday may or may not be entitled to extra pay, commonly known as “holiday pay”. This also depends on their employment contract or company policy. There is no statutory right to receive additional pay for working on a bank holiday, though many employers choose to offer enhanced pay rates as an incentive.

Alternative Days Off

Some businesses that must remain open on bank holidays may offer employees an alternative day off or “holiday in lieu”. Again, this is dependent on the specific terms set out in the employment contract.

Special Regulations

While there are no universal special regulations governing bank holidays in the UK, there are specific circumstances and sectors where unique rules apply:

Licensing Hours

For businesses in the hospitality sector, it’s essential to check the terms of your license, as extended licensing hours may be applicable on bank holidays.

Public Services

Transport services and healthcare facilities often have reduced services on bank holidays. Special contracts may be in place for employees in these sectors, stipulating pay rates and working hours.

Contractual Obligations

Businesses should be aware of any contractual obligations that may be affected by bank holidays, such as delivery schedules or service availability.


While bank holidays may seem straightforward, various legal aspects come into play for both businesses and employees. Business owners should carefully consider the impact of bank holidays on their operations and make sure they are in compliance with any industry-specific regulations. Employees, on the other hand, should consult their employment contracts to understand their rights concerning leave and pay on these days. By understanding the legal landscape surrounding bank holidays, both employers and employees can better navigate this traditional feature of British life.