Duvet day is a company-approved day off that employees can take if they feel too tired to work. It can be stipulated formally in a contract of employment and is considered part of the remunerations package along with Holiday allowance.
It differs from Holiday allowance in that no prior notice is needed. An employee receives an allocation of days where if he or she gets up in the morning and doesn't want to go to work for any reason, he or she can use a "Duvet day". This is quite common in the United Kingdom and the United States.