Can I Take Annual Leave During Notice Period?

After employees provide their notice of resignation, they may wonder whether they can take unused leave during the notice period. In short, it depends. While employees are generally allowed to use their holidays during this time, there are circumstances where their employer can refuse.

Below, we discuss the laws surrounding taking annual leave before leaving a job, including how much an employee could be entitled to and what may happen if they take too much. If you want to hand in your notice and have questions about your rights, please contact Redmans Solicitors. As sector specialists, we can answer your queries and provide expert advice.

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Can Employees Take Annual Leave During Notice Period?

Typically, employees can take annual leave after they hand in their notice of resignation. That is provided they have accrued their statutory entitlement. UK employment law supports this right, enabling employees to use up their remaining holiday while serving their workplace notice.

Crucially, though, whether or not an employee can take such leave depends on how far into the annual leave year they are. For example, if their leave year runs from January to December and they resign in June, they would have accrued only six months’ worth of leave—not the full year’s entitlement.

Furthermore, while employers generally approve requests to use annual leave during the notice period, they aren’t obligated to do so.  Should they have a genuine business need to justify the refusal, they can lawfully deny the request. That said, if the holiday is refused, other rules and obligations apply.

How to Check Accrued Holiday Entitlement

If an employee wants to find out how much annual leave during the notice period they’re entitled to, they can use a simple formula:

(A x B) – C

Here, A is the total annual leave entitlement (say, for example, 28 days), B is the proportion of the leave year completed (calculated by dividing the number of months an employee is into the leave year by 12), and C refers to the number of holidays an employee has already taken.

So, if we say an employee has 28 days’ leave entitlement, their leave year runs from January to December, they hand in their work notice in June, and they’ve previously taken three days of holiday, the calculation would look as follows:

(28 x (6 ÷ 12)) – 3

= (28 x 0.5) – 3 = 14 – 3 = 11

In this example, the employee would have 11 days of holiday entitlement remaining, which they could use during their notice period. Notably, this calculation doesn’t always provide a whole number—in circumstances where a decimal is given, it’s important to note that the number cannot be rounded down.

Can Employers Refuse Holiday Requests During the Notice Period?

Employers can decline requests to take leave during the notice period, provided they have legitimate business reasons for doing so. This same criterion applies when a regular holiday request is made, whereby its approval is subject to operational requirements.

However, while employers can decline such requests, they must act reasonably and non-discriminatorily. If an organisation turned down a request without a valid reason, a workplace dispute could arise, potentially leading to court action. To avoid this, companies must clearly communicate their decision, preferably in writing.

Can Employers Force Employees to Use Leave During Notice Period?

Under the Working Time Regulations 1998 (WTR 1998), employers are entitled to require employees to use any remaining statutory holiday entitlement after they’ve handed in their notice of resignation. That said, if a company wishes to do this, it must adhere to the strict notice requirements.

The WTR 1998 sets out that if an employer wishes to enforce holiday usage, it must give the employee notice that’s at least twice the length of the holiday being imposed. So, if an employee has five days of leave left, their employer must give a minimum of 10 days’ notice.

This requirement is particularly important if an employee has a short notice period. Should their employer fail to act promptly, it may lack the time to enforce leave usage before the employee departs. 

What Happens If You Don’t Take Leave During the Notice Period?

Sometimes, an employee does not or cannot take leave during their notice period. In such circumstances, their employer is legally required to provide payment in lieu of holiday. 

Essentially, the employee receives a payment in lieu of any outstanding statutory holiday, calculated at their regular pay rate and included within their final remuneration. This is still the case even if the employee is, for example, dismissed for gross misconduct.

When an employer calculates payment in lieu of holiday following the receipt of a workplace notice, it must do so accurately, accounting for the employee’s pay rate. Should there be a decimal figure, it’s generally advised to round up to avoid underpayment disputes.

What if an Employee Has Taken Too Much Holiday?

Situations may arise where employees have taken more holiday than they’re entitled to when they hand in their work notice. This often happens when leave is taken on the assumption of full-year entitlement rather than based on the actual leave accrued up to the resignation date. 

If this occurs, employers can typically recover the excess by deducting the overused leave’s value from an employee’s final pay. To ensure these deductions are lawful, employers must set them out clearly in employment contracts, obtain written agreement from their workforce, and communicate the details transparently at the time of resignation. Should an employer fail to follow these steps but make said deductions anyway, it risks tribunal claims.

Get Help From Redmans

If you have any questions about using your unused leave during your notice period, please contact Redmans Solicitors today. You might believe your employer has unreasonably denied your leave request or provided an underpayment regarding your unused holidays. Whatever the case, as employment law specialists, we can analyse your circumstances and discuss how you could proceed.

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