The statutory entitlement to annual leave is for 5.6 of the worker’s normal working weeks (see Annual Leave). This is the equivalent of 28 days per year for staff who work five days a week. This amount is inclusive of any Public and Bank Holidays taken as paid leave, so each day employees take off as paid leave for any reason will come off this entitlement. It is your contractual terms that will determine whether or not you have to give Bank Holidays off as an additional day of paid leave.
Some contracts specify that annual leave entitlement is inclusive of any paid Public and Bank Holidays. Others will specify the number of days for which people will get additional paid leave and may specify which days are covered.
Unless your contracts say that your employees are entitled to all Public and Bank Holidays off as paid annual leave, in addition to their general annual leave entitlement, then what you allow is at your discretion. As an employer, you will need to weigh up the needs of the business with costs and the impact on staff morale.
If you are not required to let them take the day off and you do not wish to give them an extra day of paid leave above their contractual entitlement then you do not have to. You can also tell your staff that you are closing the business on that day and you are requiring them to use a day of their annual leave for that. In order to do this, you need to give them at least two days’ notice of this enforced annual leave.
You could give your staff the option of taking the day off if they wish but as unpaid leave. If they wish to have the time as paid leave, then they will need to use up part of their annual leave entitlement to do so.