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Ask the expert: Restrictions on taking annual leave?

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This time the experts, Esther Smith and Martin Brewer give their advice on what restrictions can be placed on employees taking annual leave.

 

The question: Annual leave restrictions?

Is it possible for us to specify in our contracts that the employee can only take as much holiday as they have accrued? I know that this can be done in the first year of employment but what about after this?

Legal advice:
 

Martin Brewer, partner, Mills & Reeve
 

It is not possible to specify this for holiday under the Working Time Regulations although for any holiday in excess of this, yes you can. What you need to ensure is that you have a clause allowing the claw back of any holiday pay for holiday taken in excess of the accrued entitlement at the date of termination

Martin Brewer can be contacted at [email protected]. For further information, please visit Mills & Reeve.

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Esther Smith, partner, Thomas Eggar
 

There is nothing to prevent you as an employer stipulating this requirement in your contracts of employment with staff. Many employers, for example, stipulate when holiday may and may not be take in the holiday year, and there is nothing in the WTR to prevent an employer stating, as a matter of contract, that leave may only be taken once accrued by the employee.

Under the WTR all an employer is obliged to do is provide an employee with a minimum level of paid time off work each year, which is currently 5.6 weeks in total. There is nothing to say that this cannot be restricted to accrual on a month by month basis so long as the total amount is given, and paid for, each year.

Esther Smith is a partner in Thomas Eggar’s Employment Law Unit. For further information, please visit Thomas Eggar.

One Response

  1. Our Experience

    We had exactly this same debate about 18 months ago, albeit coming from the other direction as it was in our contracts to only allowed accrued leave to be taken.

    The upshot was that legal advice varied (as above) but we decided to err on the side of caution and remove this restriction after the first holiday year had passed, for any employee.  Additionally if you were to apply this rule and comply with the WTR your last couple of months of the holiday year would become unworkable as all of your staff would have to take their holiday allowance at once.

    Sure we’ve had one or two (out of c.1,000) do a runner, having taken 2 weeks holiday and then gone sick for a week (to ensure we had no outstanding wages to deduct from) but by and large it’s been a success, our staff feel more trusted and valued with less fake sickness absence as people can now take genuine holidays.  Meanwhile sending the debt collecting agency to somebody’s front door to collect any overpaid holiday sends a powerful message too.

    Lastly you can still always refuse and postpone a holiday on "business grounds" (as long as there are no discriminatory reasons) if you don’t trust a particular individual to return.

     

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