Annual Leave During Notice Period

Workers are entitled to a minimum 5.6 weeks’ paid annual leave per leave year as a health and safety measure to ensure that they have sufficient time away from work to rest.

Paid holiday entitlement is almost a sacred entitlement because, if a worker leaves part way through a leave year and has not taken all the holiday they have accrued at that point, they are entitled by law to be paid in lieu of it in their final salary.

When an employee hands in their notice and the employer takes stock of what payments they are due upon the termination, the employer may potentially see that the holiday lieu payment is significant if the employee has accrued a significant amount of annual leave but not yet taken it at the time off handing in their notice.

The Working Time Regulations 1998 set the rules for the taking of annual leave and they contain a provision which entitles employers to enforce holiday on an employee. This would mean informing the employee they are to take a holiday between certain dates but notice provisions must be complied with.

Enforcing holidays is usually seen in schools when school staff are told when they will take their holiday (half-term and summer holidays etc) and in manufacturing when certain parts of the year are identified as shutdown periods.

However, employers have the flexibility to decide on enforced holidays throughout the year provided they give the employee notice that is twice the length of the holiday concerned. Therefore, an enforced holiday of a week would require 2 weeks’ notice. Holidays can be enforced in the notice period which has the result of eradicating, or reducing, a lieu payment when employment ends.

To make this work more flexibly for employers, it is possible to break the remaining holiday down. If an employee resigns giving three weeks’ notice and has two weeks’ holiday remaining, employers may think they cannot enforce the whole two week holiday because there is not enough time to give the notice required.

However, if the employer were to give two days’ notice of each day of remaining holiday, each day to be taken consecutively, then it would be possible to fit in the whole remaining holiday entitlement into the notice period and completely remove the need to pay a lieu payment in the final salary. A notice to enforce a day’s holiday would need to given each day, however, the time spent doing this could be significantly outweighed by the monetary savings.

Alison Kirk, Lead Business Partner on the Corporate Team, said “It is important to realise that only working days can be used for giving notice, so the employee’s normal ‘off’ days, be that a Saturday or Sunday or any day depending on their working pattern do not count towards the notice required.”

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