Managing Annual Leave Towards the End of the Year
With the end of the year approaching, managing annual leave can become a challenge. Many employees who still have annual leave left are hoping to use it for the festive season. But how do employers manage this in a fair and consistent approach for everyone?
Some businesses that remain open during the festive season such as hospitality and retail rely on staff to be present. How do they manage those wanting to take annual leave and keep the business going without the full capacity of all staff?
*Interesting stats*
- Research shows that 65% of workers do not use their full annual leave allowance
- A survey of 1,000 employees 17% on average had unused annual leave
- Around 41% reported staff shortages as their reasons for not taking their full annual leave
- 33% of employees had a desire to sell their annual leave or reclaim it the following leave year
- Around 14% of employees said their employer does not encourage taking time off
How to manage an influx of annual leave requests towards the end of the year
There are some things businesses can do to manage their staff annual leave by implementing clauses within the contracts of employment or via business announcements such as:
- Implement a blanket ban, preventing staff from taking holidays during a specific time to cope with increased customer demand.
- Section 15 of the working time directive allows employers to require workers to take annual leave and specify the dates on which the annual leave should be taken by. E.g. At least half of the employee’s annual leave should be taken by halfway through the annual leave year (unless exceptional circumstances such long term sickness, or any family leave which has prevented an employee from taking annual leave)
- Shut down periods at the business during quieter times of the year, advising employees annual leave will be used for these shutdown periods.
Annual leave carryover – what this means for employers and employees
All employees should know their annual leave year entitlement and the leave year the company operates in. This is usually set out in their contract of employment. Employers should also include any specific rules associated with taking annual leave that the company currently enforce, such as shutdown periods or the amount of annual leave that should be taken by a specific time.
There should be a valid reason why an employee has been unable to take all their annual leave entitlement before the end of the leave year. Reasons may include:
- Long term sickness
- Family-related leave such as maternity leave
- Business reasons such as project deadlines or staff shortages
Employers should encourage all staff to take their annual leave. They can do this by implementing some of the following:
- Have a policy set out advising employees will lose their holidays if they do not take them
- Send out email reminders to employees regarding the company rules on taking annual leave
- Having clear guidelines in the employee contracts and handbook on annual leave
The law surrounding annual leave carryover
Annual leave carryover changed during the coronavirus pandemic allowing employees to carry over any unused annual leave if it had not been reasonably practicable for employees to take it. The rules were removed from January 2024 and employees had until the end of March 2024 to take any carried-over annual leave.
From 1st January 2024, an amendment was introduced and the working time regulations were amended to incorporate EU case law judgments on the carryover of holidays. The regulations re-instated the established practice on the carryover of holidays into subsequent leave years.
This rule could apply to any of the following:
- If an employee is on family leave and cannot take their annual leave, they can carry over the full statutory entitlement of 5.6 weeks to the next annual leave year.
- If an employee has been on long-term sickness the working time directive 1998 allows up to 4 weeks to be carried over, with a maximum of 18 months at the end of the year accrued
- There are other instances where carryover of annual leave could be applied such as:
- If the employer does not recognise to pay for any outstanding annual leave
- If the employer has not given a reasonable opportunity to take the leave or encouraged the employee to take annual leave
- If the employer has not warned employees about the risk of losing their annual leave entitlement if not taken by the end of the year
To find out more information or if you require any advice on managing an influx of annual leave and carryover of holiday requests, please get in contact with our team of experts.
T: 0330 107 1037
E: contact@hpc.uk.com
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