The Do's and Don'ts of Managing Annual Leave

Managing staff involves more than just overseeing work; it also includes managing holidays and annual leave effectively. As an employer, it's your responsibility to maintain accurate, up-to-date records of your employees' time off. Here are some key points to remember:

1. Annual leave entitlement doesn't expire

Employees are entitled to take their leave whenever they choose and their annual leave never expires. Employees can choose to cash in one week of leave per year (if your business chooses to do so) but this must be approved by you.

2. You can’t unreasonably refuse a leave request

When considering leave requests, businesses must act reasonably and cannot refuse annual leave requests without a valid reason.

3. You can reject requests for unpaid leave or for using leave in advance.

If your employee hasn’t accrued enough annual leave entitlement to cover their upcoming leave request/holiday, you can reject their leave request. Similarly, you can reject a request for unpaid leave.

4. You can’t force an employee to take annual leave, except during a shutdown

A business cannot force an employee to take their annual leave before it’s due, except during a company-wide shutdown. For most businesses, this type of leave typically happens during late December – early January.

5. You can require an employee to take time off, but only in certain situations

If you and your employee(s) can’t agree on when they should take leave, you can require an employee to take time off if 14 days' notice must be given.

To manage leave efficiently, consider implementing a system for tracking holidays. An annual leave planner—whether digital or a traditional wall calendar—can help you monitor leave taken and planned by your team. Ensure that Employment Agreements clearly outline all leave entitlements and any specific conditions. Additionally, provide new employees with a handbook detailing their leave rights and benefits.

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