Sunday Times - Business Doctor: Cancelling employees annual leave

Peter Done: Managing Director and Founder

January 23 2017

OP Writes: My businesses has just been commissioned to do a large project for a client which means I need all staff present and not on annual leave. Can I legally cancel booked annual leave? Weighing up the needs of the business against negatively impacting employees is a hard balancing act for any employer. Employers can legally cancel a booked period of annual leave so long as they give the required notice under the Working Time Regulations. The Regulations require notice of at least the same length as the period of leave to be given. For example, where the employee has booked off five days as annual leave, they would require at least five days’ notice of cancellation to be given. There may be contractual notice requirements over and above those provided by the Regulations but, evidently, the greater the period of notice given, the lesser the impact on the employee. Whilst the law allows booked leave to be cancelled, there are a number of factors that employers should consider before taking this step. The most important one is that the employer should not cancel leave if it results in the employee being unable to take their minimum statutory leave entitlement. Where the large project has cropped up near the end of the holiday leave year, it may be that certain members of staff will have to take their holiday so that they receive their legal entitlement. It may be possible to agree with employees that they can carry over their leave in to the next leave year, but this will create a precedent for the future and could lead to issues in the next leave year. Cancelling holiday can also lead to a claim for constructive dismissal. This is likely where the cancellation results in the employee suffering financial loss because they can no longer go on a booked holiday. Therefore, employers need a clear business reason for cancellation and need to consider all alternatives before giving notice to cancel the leave. Alternatives could hiring temps to reduce cancellations, agreeing extra hours with staff who are not booked on holiday, and discussing with those who have booked leave to reach an agreement over who is needed. Employers also need to consider how they will handle future holiday requests for this period. They do have the right to stop leave happening at particular times of the year or to turn down requests by giving a counter-notice to the employee. Counter-notice requires at least the same length of the requested holiday leave to be given so employers need to ensure they are keeping on top of any holiday requests to be certain the notice period has not passed them by.

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