Notice to take holiday during notice period

Our notice can be used to require an employee to take some, or all, of their remaining annual leave entitlement during their notice period on resignation or dismissal. As well as removing them from the workplace, it limits what you’ll need to pay them in respect of outstanding holiday pay on termination of employment. The Working Time Regulations 1998 set minimum notice requirements for requiring employees to take holiday, but you can have your own contractual rules requiring no minimum notice to be given.

Out of the workplace

Once an employee has resigned or is serving notice of dismissal, having them in the workplace may not be ideal. They can be both disruptive and lazy and they may seek to try and obtain a competitive advantage e.g. soliciting clients, downloading customer lists, etc. There are options to deal with this if you have appropriate contractual clauses in place, such as paying them in lieu of notice or placing them on garden leave. One other option, particularly if the employee’s notice period is short, is to require them to use up any outstanding annual leave entitlement by taking holiday during their notice period. Not only does this get them out of the workplace but also it reduces or extinguishes the amount you will then need to pay them in lieu of accrued but untaken holiday on the termination of their employment. So, it’s a win-win situation for you.

Statutory requirements

Whilst the Working Time Regulations 1998 do enable you to nominate specified days on which an employee must take some, or all, of their statutory annual leave, the Regulations require you to give the employee notice which is at least twice as many days in advance as the number of days of holiday that you require them to take. Your notice needs to specify the days on which holiday must be taken. For example, if you wish them to take one week’s holiday during their notice period, you would have to give them at least two weeks’ notice of the specific dates. In many cases where employees’ notice periods are short, this just isn’t going to be viable - the more holiday you want them to take, the longer the advance notice would have to be.

Different contractual rules

However, under the Regulations, it’s open to you to set out different notice rules in employment contracts and this is exactly what our Holidays Policy and Notice Periods Policy do. They both provide that you don’t have to give any minimum notice to require an employee to take accrued annual leave during their notice period. Thus, you could advise a departing employee that their holiday period is to begin immediately and this is acceptable provided your policy provisions are contractual.

Notice to take holiday

Our Notice to Take Holiday during Notice Period can be used in either resignation or dismissal cases. It cites our policy provisions and then designates particular holiday dates to be taken by the employee during their notice period. It also confirms the amount of holiday they’ve taken so far and what their total entitlement is on termination of employment. Where the designated holiday period will end when the employee’s notice period ends, our letter contains an optional paragraph stating this means the employee won’t be required to return to work at all once they’ve started their holiday. Finally, if requiring the employee to take holiday during their notice period doesn’t extinguish their outstanding annual leave entitlement, you will still need to pay them a sum in lieu of any remaining untaken annual leave on termination of employment and our letter confirms this.