Guide

Know how much holiday to give your staff

Taking holiday - notice periods, restrictions and sickness

Workers must give you notice that they wish to take leave. You can agree the notice period with your workers and should set this out in writing.

If there is no agreement in place, they must give notice of at least twice the length of the intended leave period. You must reply within the same length of time as the intended leave.

For example, if the worker gives two days' notice for one day's leave, you must reply within one day. Even if the worker gives sufficient notice, you may still refuse the request - but be as reasonable as you can.

Restricting when holiday may be taken

You may restrict the taking of leave. Restrictions could:

  • be stated in the employment contract
  • have built up via custom and practice
  • be negotiated with trade union or employee representatives

Examples include:

  • specifying periods when leave may or may not be taken
  • capping the amount of leave that can be taken at any one time
  • shutting down for certain periods, eg between Christmas and New Year or for two weeks in August

If you don't have an agreement for taking leave and you want workers to take all or part of their holiday entitlement on certain dates, you must give notice of at least twice as long as the leave period.

Resolve clashes between requests for leave by considering the needs of the business, eg peak season or a quieter period, the individual circumstances or by setting out clear rules for booking leave. It may be helpful to formalise cover for key staff on annual leave.

If you set restrictions on when holiday can be taken, bear in mind the need to avoid indirect discrimination - read more on how to prevent discrimination and value diversity.

You should also note that it's unlawful to prevent a worker taking their statutory paid holiday entitlement. Therefore you may have to allow a worker's annual leave request right at the end of the leave year to ensure that they have taken their full entitlement of 5.6 weeks or 4 weeks where you have agreed carry over.

Accruing annual leave during sick leave

A worker continues to accrue their statutory minimum holiday entitlement as normal while absent from work due to sickness. This is regardless of how long the period of sickness lasts.

Depending on the terms of their employment contract, they may also accrue any additional contractual annual leave that they would normally be entitled to.

Taking annual leave during sick leave

A worker is entitled to take statutory annual leave while on sick leave.

If the worker chooses to take annual leave while they are on sick leave but they are not receiving any sick pay, you pay them their normal holiday pay.

A worker is most likely to choose to take annual leave while on sick leave if they are:

  • not entitled to sick pay of any kind
  • on sick leave for a long period and, as a result, you have stopped paying them sick pay
  • due to return to work shortly before the end of the leave year and, as a result, would be unable to take their full holiday entitlement following their return to work

Changing annual leave to sick leave

A worker can choose to change a period of annual leave during which they are sick to sick leave. This would occur if they either:

  • become sick while on annual leave
  • have a period of sick leave that continues into a pre-arranged period of annual leave

Once the worker returns to work, they can then make arrangements to take the annual leave they missed at a later date.

Where a worker is on sick leave instead of annual leave, you should consider asking them for evidence of their sickness in line with your usual sickness absence procedures and in line with any eligibility criteria for statutory sick pay.

For example, to qualify for full pay while sick, you could:

  • require a worker to inform you as soon as reasonably possible that they are sick
  • request that they provide you with medical evidence of that sickness

For more information about sick pay, see understanding statutory sick pay.

Carrying over annual leave that is left untaken due to sickness

If a worker is unable to take all of their statutory annual leave entitlement within a leave year because of illness, they will be entitled to carry forward the unused statutory entitlement to the next leave year.

In July 2012, the Court of Appeal made a decision on an important sick leave case. It ruled that an employee on long-term sick leave is entitled to carry holiday leave forward to the next year, even if no specific request has been made to do so. On termination of employment, an employee who has been on long-term sick leave must be automatically paid for all the holiday that has been accrued over that period, whether or not a request has been made to carry it over. Recent case law suggests that employees who are unable to take holidays because of sick leave are only entitled to carry over 4 weeks annual leave unless their contract states otherwise. 

If you need further advice on sick leave and/or annual leave, you should contact the Labour Relations Agency (LRA) Helpline on Tel 028 9032 1442.