Top tips for managing employee holiday entitlement

Key considerations for holiday management

Line managers will need to consider both operational needs and individual circumstances while working on a "first come, first served" basis in terms of approval for holiday. Employers should continue to weigh the needs of the business against the unusual circumstances caused by coronavirus and managers can agree to holiday cancellations where this would not cause significant inconvenience for the organisation. However, employers should bear in mind that allowing employees to cancel holiday could exacerbate the issue of the build-up of untaken annual leave. 

Once an individual has booked holiday, there is no obligation for the employer to agree to a request by the individual to cancel or amend their holiday unless there is a relevant agreement in place to do so. Employers can cancel an employee’s period of annual leave providing they give the required notice (which is at least the same length as the period of leave to be cancelled). Employers may also consider, if appropriate, to compensate the worker for any inconvenience caused.

Updates to the Working Time Regulations 1998

While some existing annual leave policies may or may not allow employers to carry over annual leave, employers should note that the government has amended the Working Time Regulations 1998 to provide more flexibility in relation to annual leave requests, resulting from COVID-19. The legislation allows workers to carry over up to four weeks' annual leave into the next two holiday years, where it has not been reasonably practicable for employees to take holiday as a result of the effects of coronavirus.

The amended regulations also provide that where a worker leaves employment, in calculating the payment in lieu of leave, any untaken carried-over leave should be included in the calculation.

Furthermore, the amended regulations introduce a restriction on an employer’s right to refuse leave on particular days. The employer must now have ‘good reason’ not to allow a worker to take any carried-over leave. The definition of ‘good reason’ has not been provided, but it is likely that it could be based on business grounds rather than any other reason.

From a practical perspective, it should be remembered that UK statutory annual leave is composed of two elements. These are: the statutory four weeks of leave provided by the WTR and the eight public holidays granted by the UK government, making the total statutory entitlement of 5.6 weeks. The present amendment applies only to the four weeks of annual leave and does not allow for any of the additional annual leave (1.6 weeks) to be carried forward. In practice, employers may not wish to make this distinction.

How can you proactively address this? 

We recommend to:

• make sure your organisation has an effective annual leave policy and procedure in place;
• set out clear communication throughout for employees who may have questions concerning their accrued annual leave balance;
• familiarise management on how to manage requests for leave;
• ensure that every employee's written statement of key terms of employment includes a statement relating to holiday entitlement and public holidays.

Finally, employers should also remind employees of the importance of making use of accrued holiday entitlement and helping individuals to recognise the need to take some time away from work to maintain their physical and mental health.

If you are seeking advice, particularly with the current additional challenges, or if you would benefit from guidance which is compliant with UK legislation, Buzzacott’s HR consultancy team can support your organisation with tailored practical solutions. Simply complete the form below and one of our experts will be in touch.