Can we make staff take annual leave?

With the end of the financial year and gradual opening up of the country we know that this is a busy period for many businesses. We also know that a lot of employers have synchronised the leave year with the financial year which means that as well dealing with the financial responsibilities, there are also staff related issues that need to be dealt with, an important one being annual leave.

We have had a number of enquiries from employees regarding requests from their employers to take annual leave and have had some questions from employers looking for guidance on what to do with employees who have accrued large amounts of holiday.

So, can you require staff take annual leave at a specified time?

The Working Time Regulations 1998 set out that the position in relation to annual leave which is that it should be taken in the year that it accrues and that it cannot be carried forward into the next leave year. In other words, annual leave will be deemed as lost if employees fail to take it in the year that it relates to.   

Employers have an obligation to ensure that their employees take time off. If on review you find that you have employees with an excessive amount of holiday to take then, provided that you give your employees enough notice, you can require them to take annual leave at a specified time.

What is the correct level of notice?

Regulation 15 of the Working Time Regulations provides that the notice should set out the days in which leave is required to be taken by the employee. The correct level of notice required is double the amount of leave that you are requiring your employee to take. For example, you will need to give an employee 3 weeks’ notice where you require them to take 1.5 weeks’ leave. The notice should also set out the dates in which the employee is required to take leave.

You can alter the minimum time limits by agreement with the employee, either at the time you are requesting them to take leave, or by a clause in the contract or holiday policy.

Furloughed employees and annual leave

If you have employees who are furloughed, you will know that they continue to accrue holiday like any other employee during their period of furlough. With the current restrictions set to be eased in the next coming months, you may be considering how best to achieve the reintegration of employees in the workplace.

You will probably have several employees that have been prevented from taking holiday because of the workload and similarly a number of furloughed employees that also have a considerable amount of annual leave to use. Unless you already have measures in place, you can imagine what the disruption to the operation of the business would be if large numbers of holiday requests are received from employees when they all eventually return.

You may want to consider requiring those employees on furlough to take annual leave to avoid this risk. We would suggest that you give them ample notice and discuss with them the reasons why you are requiring them to take annual leave and highlighting that the decision is based on the needs of the business. Informing your furloughed employees that they would receive 100% of their wages for any period of annual leave is likely to be welcomed and could help alleviate the concerns of any employees.

Relaxation of the rules due to the pandemic

The impact of the pandemic has meant that a lot of businesses have been left under a great amount of pressure to allow staff to take holiday whilst managing the operational needs of the business.

In March 2020 the rules in relation to annual leave were relaxed as a result and so up to 4 weeks’ untaken annual leave can be carried over into the next two leave years. (now one year)

So, if you are at a stage where you have a number of employees with lots of annual leave to take in a short period of time, you do not have to require them to take it now if you are concerned that your employees may lose their entitlement for failing to take it but at the same time taking will have an impact on the business.

Going forward

It is always good to regularly review how much holiday your employees have left to take throughout the year. The reason being is two-fold, it helps you to better manage the business and signposts those employees who are not taking holiday regularly throughout the year.

It is important to encourage your employees to take annual leave regularly as not taking breaks could have an impact on performance (and potentially mental health) but it also helps avoid situations where large numbers of employees are rushing to take holiday around the same time.