Compressed hours change how annual leave is calculated and taken. Under a compressed hours arrangement — for example, working full-time hours across 4 days instead of 5 — your leave entitlement and how it is booked need to be adjusted to ensure you receive the same total leave time as a standard full-time employee.
Key Takeaways
- Employees on compressed hours are entitled to the same total leave hours as a standard full-time employee — the leave is just taken in blocks that match their compressed days.
- If you work 4 × 10-hour days, taking one week of annual leave = 4 days of leave (not 5).
- Bank holidays need careful handling — if your non-working day happens to be a Monday, you may lose a public holiday that full-time staff receive.
- Employment contracts should clearly state leave terms for compressed hours to avoid confusion.
- UK employment law protects compressed hours workers from unfavourable treatment compared to full-time colleagues.
How Annual Leave Works on Compressed Hours
If you work a compressed week, your annual leave is calculated in hours or days rather than weeks:
Example (UK): A standard full-time employee works 5 × 7.5 hours = 37.5 hours per week and receives 28 days (5.6 weeks) of annual leave. An employee doing the same 37.5 hours in 4 days (4 × 9.375 hours) should receive the same total leave. That means 22.4 days of their compressed pattern (5.6 weeks × 4 days per week) — typically rounded up to 23 days.
Example (Australia): Under the Fair Work Act, annual leave accrues on a pro-rata basis for part-time employees. For compressed hours where you are full-time but compressed, the same 4 weeks of annual leave applies — but taken in 4-day blocks rather than 5.
Example (New Zealand): The Holidays Act 2003 provides 4 weeks of annual leave. For compressed hours employees, this is 4 weeks of your compressed pattern (e.g., 16 days if you work a 4-day week).
Booking Leave on a Compressed Pattern
When you take annual leave on compressed hours:
- You book leave for your working days only — if your non-working day is Friday, you do not need leave for Friday
- A week off = the number of days in your compressed pattern (e.g., 4 days)
- If you need a single day off, you book one day of leave, which uses more of your leave hours than a standard employee’s single day
This means compressed hours workers use their leave balance faster per day of actual leave, but the total time off is the same. A full week off is still a full week off.
Public Holidays and Compressed Hours
Public holidays are where compressed hours create the most confusion:
- If your compressed day off lands on a public holiday: You lose that public holiday because it falls on a day you would not have worked anyway. In the UK, you may be entitled to an additional day in lieu (depending on your contract). In Australia and NZ, the same rule applies — if the public holiday is not one of your “otherwise working days,” you do not get it.
- If you work on the public holiday: You are entitled to the same public holiday benefits as any other employee — overtime rates, alternative holiday, etc.
- Best practice: Many employers give compressed hours workers a pro-rata public holiday entitlement or a specific number of lieu days to compensate for lost bank holidays.
Adjusting the Pattern for Leave Periods
Some compressed hours policies allow temporary adjustments:
- Returning to a standard 5-day pattern for a specific period (e.g., a busy season)
- Taking annual leave on what is normally a non-working day (by booking the day as leave)
- Swapping compressed days to accommodate a public holiday or personal event
These adjustments should be documented in the policy or agreed in writing with the employee. Frequent changes can undermine the purpose of compressed hours and create confusion.
FAQ
Do I get fewer holidays on compressed hours?
No — you get the same time off. Your total annual leave allowance in hours is the same as a full-time employee. You just take it in fewer, longer blocks.
Am I entitled to bank holidays on compressed hours?
You are entitled to bank holidays that fall on your working days. If your non-working day is a Monday and most bank holidays fall on Mondays, you may miss out. Many employers address this by giving compressed hours workers additional lieu days.
Can my employer refuse compressed hours because of leave complexity?
In the UK, employees have the right to request flexible working (including compressed hours) from day one. The employer can refuse only on specific business grounds. “Leave is too complicated” is unlikely to be a valid refusal reason.
How do I calculate my daily leave rate on compressed hours?
Your daily leave rate is the number of hours you would have worked on that day. For a compressed 4-day week at 37.5 hours, each day is worth 9.375 hours of leave. Your employer’s leave system should handle this automatically.
Can I take a half-day on compressed hours?
Yes — but since your days are longer, a half-day on compressed hours (say 4.5 hours) gives you more time off than a half-day for a standard employee. The leave system should allow proportional bookings.