Annual leave and the law

With the holiday season approaching and no doubt trips away planned, our specialist employment solicitor, Katie Bowen Nicholas, wanted to take the opportunity to discuss how the law impacts annual leave for both employees and employers. 

Employees legal rights around annual leave

Holiday entitlement

Both full-time and part-time employees are legally entitled to 5.6 weeks paid holiday each year. For full-time employees this equates to 28 days paid annual leave a year. You might be entitled to additional annual leave as outlined in your employment contract. 

It is essential to coordinate your holiday schedule with your employer as there is no guarantee of taking time off whenever you want. 

If you fall ill during a pre-planned vacation, you must report your sickness to your employer if you wish to take any part of your annual leave as sick leave. 

You cannot opt for payment instead of statutory leave unless your employment has ended, in which case you should receive any accrued but unused holiday entitlement for that year. Your employer might require you to use up your remaining annual leave during your notice period, whether you are working or on garden leave.

Click here to calculate your holiday entitlement: https://www.gov.uk/calculate-your-holiday-entitlement

How much notice do I have to give, and can my employer refuse my holiday request? 

Ideally, employees should put in their request for annual leave as far in advance as possible and should ensure that a request for holiday is made at least twice the amount of time beforehand unless your employment contract specifies a different amount of notice.  For instance, if you wish to take 5 days off, you will need to ask at least 10 days before. 

Your employer has the right to decline your holiday request, especially during busy periods. If you have already scheduled time off, your employer must provide the same amount of notice for cancellation as the duration of leave you requested. For instance, if you asked for 5 days off, your employer must tell you that they are cancelling your time off at least 5 days before your leave was due to start. 

While your employer can reject specific holiday requests, they are obligated to allow you to take your annual leave entitlement.

If your employer cancels your approved leave without a valid business reason, leading to the cancellation of your planned holiday and financial loss, you might have grounds for constructive dismissal. 

What happens to my annual leave when I leave my job?

If you leave during the holiday year, your employer will need to calculate the accrued entitlement for that holiday year and the total annual leave taken.

If you have used more leave than you have earned, the employer will need to determine the worth of the extra days taken and subtract this from your final salary payment. The deducted amount should be clearly indicated on the payslip.

If you have unused accrued leave, then the value of the accrued but untaken leave will be calculated and included in the final salary payment.

Employer's legal rights and responsibilities around annual leave

Refusing or cancelling a holiday request

An employer has the right to decline or revoke a holiday request. It is essential to inform the employee in advance, giving them the same amount of notice as the duration of the requested holiday. For example, where an employee requests 7 days off, but the employer discovers a staffing shortage for that week, they must inform the employee of the need to cancel the time off at least 7 days prior to the scheduled start date.

An employer must have a valid business justification to decline or revoke a holiday request.

It is crucial to acknowledge that rejecting or revoking a holiday request may impact the relationship with employees, especially if the employee has already made arrangements for the holiday.

An employer cannot deny employees the right to take their entitled annual leave. By law, an employer must ensure that employees can utilise their allocated holiday time within the year.

Insisting on holiday at certain times of the year

As an employer, you can insist that on certain dates, employees take leave e.g. over the Christmas break. If an employer requires employees to take holiday on certain dates, then they should provide advance notice and should ensure that employees are informed at least twice as many calendar days before the number of days they are required to take. 

Carrying forward an employee's untaken leave

The law's intention is to guarantee that employees take necessary rest, and not utilising their annual leave goes against this objective. It is advisable for employees to use all their leave entitlement within the same leave year.

In situations where taking leave is not possible, employers should consider allowing employees to carry over their unused leave. Employer should outline within their annual leave policy the duration for which leave can be carried over and set a maximum limit on the amount of leave that can be carried forward.

Employees can carry over some of their statutory holiday entitlement in certain situations e.g. if they are on long term sick leave. Furthermore, an employee who is on statutory leave e.g. on maternity leave is able to carry all of their statutory 5.6 weeks holiday entitlement if they are unable to use it as a result of being on statutory leave. 

How can Hegarty help? 

Whether you are an employee or an employer, our employment law experts can help you with your legal rights around annual leave. 

If you have any further questions about holiday entitlements, please contact our team using the form below.