All full-time workers will be able to take nearly a month’s paid holiday a year, under legislation to be announced this week.
For the first time, it will be illegal for employers to include the eight bank holidays in the statutory 20-day entitlement. The changes are expected to be announced in the Work and Families Bill later this week.
The UK is the only country in the EU to allow companies to include public holidays in the statutory holiday allowance.
The deal, which was worked out with union leaders in Warwick last summer, could be introduced towards the end of next year.
But business leaders have warned that the government’s increasingly generous approach to workers’ rights could harm the UK’s competitive edge.
CBI deputy-general, John Cridland, said: “Companies want their staff to enjoy adequate paid holiday but the job still needs to get done. This move will impose a substantial cost on some businesses, and so the new rights must be phased in over time.”
It is not clear how part-time and casual workers will be affected by the holiday legislation.