November 19, 2019

How to Prepare for the New Annual Leave Year

Does your annual leave entitlement renew in January? Have you got employees with weeks’ worth of holidays still left to take? Can they carry it into next year? Read on for everything you need to know about the importance of employees taking annual leave and the rules for carrying days over.

Why is the management of annual leave so important?

From a business perspective the impact of getting holiday planning wrong can be significant. I’m sure you remember when Ryanair were forced to cancel 40-50 flights every day for six weeks due to a problem with managing pilots’ holidays.

So, as the annual leave year comes to an end, what do you need to consider? And what does best practice look like?

Encourage your employees to take annual leave

Whether you have a self-service application, a spreadsheet or paper-based forms, managers need to monitor how many annual leave days their employees have left to take. The aim is for employees to take their annual leave at regular periods throughout the leave year.

Annual leave ensures employees have regular paid breaks from work. It gives them the opportunity to rest and re-energise and ultimately improves work-life balance. Motivation and productivity levels can be higher in employees who take their holidays than those that don’t.

But what if a manager has done their best to encourage an individual to take leave (make notes of these conversations) and the employee still won’t submit requests? An employer can nominate specific dates for an employee to take some, or all, of their statutory annual leave entitlement. An employer must give the correct notice to the employee. The required notice is a minimum of twice as many days as the number of days the employer wishes the employee to take.

What are the rules on carrying over holidays?

You need to follow your company policy that will usually be contained in your employee handbook.

What about the use it or lose it rule? You can take this approach. However, you need to ensure you have given employees every opportunity to take their leave during the year.

Have you considered the following?

  • An employee who has carried over annual leave will have a larger leave balance to take in the following year. This can be hard to manage if you don’t have a piece of software to account for such exceptions.
  • Your company policy should set out how many days employees can carry over (with approval). This should only be considered when the employee has taken at least four weeks of holiday.
  • Set out timescales for when the carried over days must be taken by. For example, within the first three months of the new leave year.

If employees have not been able to take their annual leave entitlement because of sickness, they should be allowed to carry the days over. This only applies to the first four weeks of leave.

In addition, employers should note there are special rules on carry over with other types of leave, such as maternity or adoption.

Next steps

You can download our guide to find out more about the legislation governing holiday pay and entitlement and how to calculate holiday entitlement.

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About the author

Louise Gillibrand

About the author

Louise Gillibrand

Louise is a generalist Human Resource professional with over 18 years’ experience across a variety of sectors including care, medical, retail and telecommunications, and is a member of the Chartered Institute of Personnel and Development. Louise provides sound practical and business-focused advice in line with employment legislation and best practice, and has worked in partnership with line managers, senior operational managers and directors. Typical consultancy projects include advice on complex employee relations issues, redundancy programmes, restructures, TUPE, recruitment, policy writing and grievance/disciplinary handling. In addition to her generalist knowledge she is experienced in delivering training on a wide variety of employment law and HR subjects. Louise joined the Moorepay consultancy team in October 2007.

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