If a member of staff hands in their notice at work, but still has some holiday accrued, management might find themselves asking whether or not their employees can take holidays during their notice period.
In theory - yes - employees can claim holidays during their notice period, but it depends on the individual's circumstances and the terms of their employment contract.
Read on to find out the specifics; whether you're an employee or a manager, this short guide should help clear up any confusion.
Annual leave allowance
Firstly, whether an employee is allowed to take holidays during their notice period or not 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 a scenario where an annual leave allowance year runs from January to December, and the 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. Plus, if they use up their annual holiday allowance during this time, they should still receive their usual wage.
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.
An employer should carefully consider whether it's more cost-effective for a business to offer holiday payment in lieu, or allow an 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.
There's another situation where an employer won't grant any leave during a notice period, and that's 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 the final payment. However, this should be clearly specified in a written employment contract.
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 aspects relating to this topic are fully detailed in an employment contract, so there's no confusion later on in the worker's employment.