All good things must come to an end - including employment. Whether they just don't want to do it any more, or they've been accepted for a position elsewhere, employees will have to move on at some point.
In the majority of situations, when someone decides to leave the company, they'll have to hand in their notice right away, and continue to work until their leaving date. It's part of their working agreement - they can't just up and leave whenever they fancy it. This helps the rest of the business prepare for them being gone.
One question that comes up often during the notice period is 'what happens if they haven't taken all their annual leave allowance'?
If they still have some holiday accrued, management might find themselves asking whether or not they can afford to let them take time off work.
Here we'll have a look at the specifics. Whether you're an employee or a manager, this short guide should help clear up any confusion.
Annual leave allowance
In theory - yes - employees can take holidays during their notice period, but it depends on the individual's circumstances and the terms of their employment contract.
Firstly, whether or not they can take holiday during their notice period depends if they've got any accrued annual leave left. This can be worked out according to the rate of annual leave accrual and when the notice of employment termination is given, compared to the amount of annual leave already taken.
Consider this standard scenario: with an annual leave allowance year running from January to December, the full-time employee is entitled to 28 days leave.
If they resign in June, they'll only be entitled to 6/12s, or one half, of this full entitlement (ie. 14 days). If they haven't yet used up these 14 days, they can ask to take them during the notice period.
Bear in mind that annual leave still continues to accrue during the notice period - in the above example, it'd be 2.33 days per month.
Additionally, if they use up their annual holiday allowance during this time, they should still receive their usual wage for it.
Can an employer refuse annual leave during the notice period?
In most cases, an employer will let them take the annual leave they've accrued during the notice period. However, if this isn't practical for business reasons, they can refuse a holiday request. In this case, the worker will be paid in lieu of the leave.
It's essential that an employer gives a valid reason for refusing leave during a notice period so that it isn't regarded as discrimination.
Companies should carefully consider whether it's more cost-effective to offer holiday payment in lieu of time off, or allow the employee to take their outstanding annual leave. Often, it makes better financial sense to let an employee use up their annual leave during their notice period (so they won't be paying extra), but if they're short-staffed and need the help, the cost might be worth it to keep them around.
What if an employee takes more leave than they've accrued?
There's another situation where an employer won't grant any leave during a notice period.
This is if the worker has already taken more time off than they've accrued. In this case, an employer can deduct the extra holidays they've taken from their final salary payment. However, this should be clearly specified in a written employment contract, and the worker needs to agree to this in writing.
Can employers force someone to take leave during the notice period?
Employers can also enforce staff who've resigned to take their remaining accrued annual leave, as part of The Working Time Regulations 1998. This means employers can tell staff when to take their remaining leave, but they need to give them notice.
For every day of imposed annual leave, employers need to give a minimum of two days notice, unless otherwise stated in an employment contract. So, for instance, if three days of leave need to be taken, an employer must give six days notice.
Enforced leave can be broken down into individual days rather than taken all at once. This may be useful if the accrued number of days is large, and there isn't enough time to give the required notice.
Can employees take holidays during their notice period? is not the simplest question to answer, so employers should ensure that every possible issue with this topic is fully detailed in employment contracts, so there's no confusion later on in the worker's employment.
How do you calculate final holiday pay?
We've got a guide to calculating holiday pay over at our leftover holiday allowance article.