Can I use my holiday entitlement during my notice period?

Can I use my holiday entitlement during my notice period?

A common question for employers when a member of staff is serving their notice is ‘can I use my holiday entitlement during my notice period?’ And while losing a member of the team can be a difficult process, especially if you invested in that person, it’s good to know what you can and cannot do around holiday entitlement.

Before answering the question on annual leave, you will need to understand how much holiday they have taken. And how much, if any, they have left. Some staff may not use their holiday entitlement, so you will need to know what holiday they have left and if you can force them to use this during their notice period.

Have they taken more than they’re now entitled to?

Your business may not allow staff to take holidays until they’ve accrued the time. Although, most companies are more flexible and allow staff to take holiday as and when they need to.

The risk of this approach is that when an employee does hand in their notice, there’s a chance they’ve taken more holiday than they’re entitled to by that point in the year.

You can claim this time back from the final pay if you have it in writing. Make sure your employment contracts are up to date and that you include that you will take any over-use of holiday from their final pay.

Do they have any more left to take?

However, it’s more common for employees to have holiday leave left to take. In this case, either the employee takes the leave, or you pay them for those days or a combination of both.

If you are terminating the employment, then you will still have to pay any outstanding holiday entitlement.

Where this differs is if you offer your employees more than the statutory minimum. As Duncan Urquhart from NDL-HR explains:

“An employer can offer more paid holiday than the legally required minimum of 28 days (UK). However, the employer does not have to apply all the rules that apply to statutory holidays to the extra holidays.”

Can they demand to use their remaining holiday entitlement to finish before their notice period ends?

Yes. If an employee has holiday entitlement left to take, and they give reasonable notice (or abide by the specific notice set out in their contract), then they can request to take those holidays. However, you can refuse the request for valid business reasons.

As an example: Gary’s notice period is a week, and he has a week’s worth of holiday to take. However, you need him to hand over to another employee. So, you’re probably within your rights to refuse him taking the whole week.

If his notice period is a month and he only has a few days to take, then it’s difficult to see a valid business case for refusing the request.

Can you force them to take un-used entitlement before they leave?

Yes. The Working Time Regulations allows you to specify the dates that an employee must take their annual leave, providing you give them suitable notice.

The minimum notice is the number of days you want them to take, in advance of them taking it. For example: if you want them to take five days’ holiday, you have to give them five days’ notice.

Tracking Holiday Entitlement

As an employer, the best thing you can do is to track holiday entitlement every month so you can make sure your staff are using it throughout the year. By tracking holidays, you’ll reduce the risk of staff taking either too much or too little holiday. And can better plan to your business needs.

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