Is Your Holiday Policy Fair?

holiday policyPhoto by Helloquence on Unsplash

Taking time off from work should be a straight forward affair, but as with most things HR-related, it rarely is! Compiling a fair and consistent holiday policy can be a delicate balancing act. The intricacies will be dramatically different from one business to the next, but ultimately should be fair to both employee and employer. Let us walk you through a few things you should consider when documenting your holiday policy.

Annual Leave Entitlement

First thing’s first: how much leave are your employees entitled to? Statutory entitlement in the UK is 5.6 weeks’ paid holiday per year. For a standard, 5 day week, this equates to 28 days, and you can include bank holidays in this. However, there’s nothing to stop you giving more. It’s a great perk that can help you when hiring, and well rested employees are productive employees.

Where things get tricky is calculating entitlement for part-time employees, or employees who start or leave halfway through a year. What about Davy Davison who started mid-May working 3 days a week, then switched to 4 days a week in June and handed in his notice at the end of August? What should he be entitled to?

The Holiday Tracker takes care of all this mental arithmetic for you, and we’ve also created a free online calculator you can use if you’re not ready to take the plunge yet. However you choose to calculate it, one key thing to remember: whatever figure you’re left with, you can round that figure up, but you can’t round down!

Carry-over and Additional Entitlement

What happens at the end of the year if your employees haven’t used all of their entitlement? Do they lose those days, or do you allow them to carry holidays over into the next year? If you do, is there a limit on the number of days (or hours) they can carry-over? Do they have to use those carried-over days by a certain date?  Is that all documented?

A common staff benefit employed by businesses is to reward long-service by granting additional entitlement. For example, after 5 years’ service an employee’s entitlement increases by 1 day. A common mistake companies make here is not being explicit as to when the award is granted. For example, if my start date was 13/2/2010, do I receive my extra day on 1/1/2015, 13/2/2015 or 1/1/2016? If it’s the middle option, does that then get calculated pro-rata for 2015?

Who Gets Priority

Inevitably there are times of the year where demand for time off becomes competitive: Christmas and school holidays being the main contenders. There’s a good chance your holiday policy defaults to a “first-come first served” approach, but is this the fairest?

A common alternative is to implement a rota system for those busy periods. Pull names out of a hat to decide an initial order, then those people in turn get to request any holidays they want during the busy periods. At the end of the year, bump the person at the top of the list to the bottom of the list for next year. Eventually everyone has a chance to choose first.

Some people might be prepared to give up their turn, if they don’t have kids for example. If you allow this, then ensure they choose last, not just skip a turn – it’s not fair for them to let their friend choose first and then they go next.

How Much Notice?

“Can I have the next two weeks off?”

It’s probably a bit short-notice for an employee to be given two weeks off, starting next week, but where do you draw the line? This is definitely something that should be documented in your policy.

The exact rules will vary from business to business and might depend upon the size of your teams. You may also consider different rules for different lengths of holiday and maybe special rules for different times of the year (Christmas?).

A good starting point is to require between 2 and 4 weeks’ notice for 1 or more weeks’ holiday. This gives you plenty of time to arrange cover and any transfer of responsibilities.

Taking a couple of days off usually has less of an impact on your business, so you might require less notice. A simple solution is to double the number of days’ holiday to get the notice required. So, you’d need 4 days’ notice if you were requesting 2 days off.


A lot of frustrations are born, and time wasted, because employees don’t always know what how many days holiday they have left or when they can take it. You can improve the fairness and visibility of process by using an absence management tool like The Holiday Tracker. Employees have clear visibility of what their entitlement is, how much they have left and what, exactly, they’ve already used. They can also check to see if others are already off before making their own requests, saving everyone time if there are already too many people off.

If It’s in the Policy, It’s in the Policy

The key to all this is to make sure you think it all through, make the decisions and document it in your holiday policy. Then, most importantly, communicate that policy to your employees.

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