Managing Annual Holiday Leave – A Step-by-Step Guide

Written by Andrew Johnson, Founder and CEO HRGuide - Thu 10th Oct 2024

Introduction

As a business owner/operator you are responsible for managing the holiday leave for your employees.  Managing multiple holiday requests can be challenging, particularly when employees desire the same holiday periods off. The other challenge is ensuring you have adequate cover across your business to ensure you maintain productivity and continuity of service to your customers.

Holiday Leave Entitlement

All full-time employees are entitled to a minimum of 28 days holiday leave per annum (Including bank holidays) by law. This entitlement is legislated for under the Working Time Regulations 1998 to ensure employees get adequate holidays throughout the year. Consequently, employees may not carry any holiday entitlement forward. or receive payment for unused holidays unless specifically agreed in writing with the employer. If they don’t use it, they lose it. 

Every business is free to determine its holiday year. Some companies align it with the calendar year, other business align it to the Companies Financial year, so the costs associated with employee holidays are included in the accounts for that year. An employer has a responsibility to ensure all employees take their annual holiday entitlement and they take it throughout the year, so there are not large amounts of untaken holiday “backed up” toward the end of the holiday year. If this occurs, you will have many employees requesting holiday at the same time which you can’t necessarily meet, and which means you could impact the service offered to customers and productivity during this period.

Planning Ahead

The best way to deal with any problems is to plan ahead and anticipate the issues before they even arise. What happened last year? What’s the worst-case scenario? What do you do if two people ask for the same time off? By looking at what has happened previously and anticipating other issues you can start to put plans in place to deal with them before they come up.

Creating a Holiday Policy and Holiday Request Procedure

Having a drafted holiday policy and a detailed procedure for employees to request holiday will help manage holiday requests in a fair and timely manner and ensure that employees take regular holidays throughout the year minimizing the impact on the business and preventing end of year issues.

Detailed below is a Template Holiday Policy and Procedure

  • A team members annual holiday entitlement is shown in their contract of employment.
  • It is our policy to ensure that team members take all their holiday entitlement in the current holiday year. We do not permit holidays to be carried forward and no payment in lieu will be made in respect of untaken holidays other than in the event of termination of a team members employment.
  • We operate an online system for booking holidays (many employers use an electronic holiday booking system to manage holiday requests and track holiday taken). All team members are given the rights to request holiday leave online. All team members can view their holiday allowance online at any time.
  • Once a team member has registered their holiday request online, the Line Manager receives an e-mail to either authorise or decline a request.
  • The team member will then receive an email from their Line Manager authorising or declining their request. If a team member feels their request has been unreasonably refused for any reason they should refer the matter to their Line Manager for an explanation.
  • It is important that we endeavour to ensure team members have the opportunity to take their holidays at the time they request them, but we will need to balance their requests with the needs of the business.
  • All holiday requests should be made at least two weeks (you could increase this notice period to meet the needs of your business) before the requested leave period. Any holidays requested without the necessary two weeks’ notice period will be rejected unless specifically agreed by exception by the Line Manager.
  • Holiday requests will be treated on a first come, first served basis.
  • Line Managers should plan leave around Christmas so the business is adequately covered during this period and that this is equitable for all.
  • All team members should wait to receive authorisation from their Line Manager before they make any firm holiday arrangements. Any costs incurred due to cancelling or changing prior arrangements will be the responsibility of the team member.
  • Team Members may not normally take more than two working weeks consecutively unless agreed by exception. (Refer to the Departmental Manager)
  • Holiday pay will be paid at normal basic pay.
  • (If applicable) Team Members are required to reserve sufficient days from their annual entitlement to cover the Christmas/New Year shut-down period. If they have not accrued sufficient holiday entitlement to cover this period, they will be given unpaid leave of absence.

 

Points to Consider and Frequently Asked Questions (FAQs)

Refusing holiday requests - If you can, it’s always best to approve holiday requests. However, there may come a time when you have to decline one. This may be due to holiday conflicts, the request coming at a busy operational time or because of the length of the request.

Communicate with Team Members - Whatever you do it’s important you communicate with your team members. This way team members are made fully aware of any existing policies in regard to booking time off, any flexible working arrangements can be clearly outlined, and you can outline your position on refusing requests. This way everyone is clear in terms of expectations and there can be no complaints when it comes to potentially refusing requests.

Do parents take priority? - Absolutely not. If you give parents priority when divvying out summer annual leave, you could face accusations of unfair treatment from non-parents. Those without kids could argue you’re punishing them. To avoid such claims, decide on a fair way to assign holidays. Remind team members we operate on a first-come, first-served basis, so they need to plan their holiday leave and make requests as early as possible.

Do I need to give an adequate reason for refusing holiday requests? - You must have a valid reason to refuse annual leave, for example if too many people are already off or it’s a busy time of year and we need to maximise production.

I’ve had to decline a parent’s time off. What now? - Team Members who’ve worked for you for more than one year can take unpaid leave to look after their child. They can take 18 weeks’ leave up to the child’s 18th birthday. Working parents can take a maximum of 4 weeks parental leave in one year. And they must take leave as full weeks—equal to their own working week—rather than an odd day. Team Members must give you 21 days’ notice of when they want to take parental leave. And you must have a ‘significant reason’ to postpone their request.

What can I do if a Team Member is not requesting annual leave and it is building up? - As a rule of thumb, team members should be taking about one week’s holiday leave every three months from the beginning of the holiday year. If they are not, you can inform them that you will assign them holiday leave that they must take on the dates you assign them. Keep an eye on holiday leave taken by your team every month to ensure it doesn’t back up and is spread out.

 

Get expert advice on managing employee retention from HRGuide

Effectively managing annual holiday leave is essential to maintaining a healthy and rested workforce, whilst accommodating everyone’s leave requests. Download our more detailed step by step HR How to Guide for more detail on managing holiday leave by subscribing to https://www.hrguide.co.uk/subscribe.php

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