Can an employer dictate when you take holidays? The ultimate guide

The law on holiday entitlement states that employers should “actively encourage” workers to take their holiday, but can require employees to take annual leave on days their employer specifies, such as bank holidays. In these cases, employers must give their employees two days’ notice for every day of leave they’re being required to take. Employers must also inform employees which dates they can’t take holiday on.

That said, employees also have rights. They are entitled to a minimum of 5.6 weeks, or 28 days, paid annual leave. This is a statutory right, but it does not mean employees have full control over when they can take holiday.

Below, you will learn what the laws are regarding whether an employer can dictate when their employees take holiday, whether annual leave restrictions exist in certain jobs, whether employers can refuse annual leave requests, whether an employee can challenge their decision, and the risks and considerations for both employers and employees regarding holiday entitlement.

What does the law say?

According to the Working Time Regulations 1998, employers are legally able to dictate when their employees can and cannot take holiday. However, it also states that all full-time workers are entitled to 28 days annual leave. Twenty days must be taken in the year leave has accrued, and up to 8 days can be carried over to the next leave year if both employer and employee agree.

Employers can offer more leave, and many do to attract new staff. The rules that apply to the statutory leave period of 28 days do not apply to any extra leave.

The law also applies to agency workers, workers with ‘irregular hours’, and ‘part-year’ workers who spend at least one week in a leave year during which they do not work and are not paid. New rules regarding holiday entitlement for irregular workers apply from April 2024.

Usually, companies include holiday entitlement rules in their employee contracts. “This will include the process for requesting leave, the notice period required by both parties, and any specific restrictions,” Alex Ugarte, operations manager at London Office Space, told us.

We also spoke to Tina Rahman, founder of HR and employment law company HR Habitat, who said: “Even if annual leave entitlements are not specified in the employment contract as an ‘expressed term’, then it will be regarded as an ‘implied term’ where the statutory rules will apply.”

Are annual leave restrictions more common for certain professions?

While it’s important that employees take their annual leave, it is a prudent strategy for seasonal businesses to consider imposing holiday restrictions when they enter busy trading periods.

For instance, farmers need all agricultural workers available at harvest time, while leave restrictions are also imposed on police for operational reasons so they can cover specific events. Hospitality workers often take holiday in January after Christmas trading, and their annual leave requests may be denied during the summer holiday season.

In these examples, as long as the restrictions are in an employee’s contract and the employer gives appropriate notice, they can insist employees do not take holiday at busy times. Usually, employees will understand and abide by the request.

If employers anticipate a busy period, they could consider buying holiday days from staff in exchange for them working the hours instead.

Even so, “employers should treat urgent requests on a case-by-case basis, as rejecting requests for employees who genuinely require it, such as for caring duties, may result in claims of discrimination brought against them,” said Rahman.

Can an employer refuse an annual leave request?

Employers can refuse an employee’s holiday request, as long as they meet the statutory requirement that full-time equivalent employees receive 28 days holiday annually. Employers need to:

• Provide a valid business reason for the refusal
• Give notice
• Apply the rule to everyone

“UK employers can refuse leave requests if it doesn’t suit business needs, provided they give notice equal to twice the length of the requested leave,” said Ugarte.

If an employer does not have enough staff to cover working hours during busy periods – for instance, ahead of a deadline on a crucial order – this is a valid reason to refuse leave requests. In these circumstances, employers must give notice to staff that they can’t take leave during this set period. The notice period for the refusal must be at least as long as the period of annual leave the employee wanted to take. If not, the employee is entitled to take the holiday and be paid for it.

During the COVID-19 pandemic, employers were able to refuse holiday requests for key workers. During this period, the law was amended temporarily to allow workers to carry forward up to four weeks of holiday into the next two holiday years if they could not take holiday during the pandemic because of their role as a key worker.

Can an employee challenge the refusal?

An employee can challenge their employer’s decision to refuse an annual leave request, particularly if an employee’s contract states that the employer cannot dictate when annual leave is taken. If the employer’s request is contrary to the employee’s contract, the employee has a good case to challenge it as a breach of the employment contract.

However, there are certain days that employers can insist employees take as holiday, including Christmas Day, bank holidays, and periods when a workplace shuts down, for instance at a school. Employers can also make employees take unpaid leave if it’s in their contract.

Should some employees get priority on their chosen dates?

This is a contentious issue in the workplace. Parents face a juggling act balancing work with childcare outside of nursery and school hours. ONS data from 2021 showed that, for the first time, over half (50.4%) of families with children had both parents working full-time.

This supports the argument that parents should get priority for taking annual leave during school holidays. For workers who don’t have or never intend to have children, this policy may restrict when they can take holiday, as their employer must ensure enough staff are available at any one time to complete the work.

However, it is against employment law to discriminate based on age, sex, race, or religion. This means that no-one – not even a parent – is entitled to special treatment in the allocation of holiday.

In practice, many employers and staff teams will manage this together to help each other get their holiday preferences.

The risks and considerations for employers and employees

“A balanced approach to annual leave policies – one that considers both the needs of the business and employee well-being – is crucial,” said Ugarte.

We take a look at the risks involved with dictating holiday dates as an employer, as well as the annual leave considerations employees should make:

The risks of dictating holiday for employers

Employers need to carefully consider how to manage annual leave policies to comply with the law, manage employees’ expectations, and ensure business needs are met.

Employees not taking the annual leave they are entitled to is a significant issue. The most recent study by the TUC from 2019 found almost two million workers did not get the correct holiday entitlement, with more than one million not getting any paid annual leave at all. The main reasons were due to workload, employers denying leave requests, and companies not keeping up to date with the law.

Recent research from PeopleHR found that the amount of annual leave taken in 2023 dropped by 8% from 2022, from 36.7 days to 33.9 days.

Industries with labour shortages accounted for the biggest drop, with existing workers working longer hours to cover the shortfall. The farming sector recorded a 12% decrease in annual leave taken between 2022 and 2023, followed by the construction sector, down by 11%.

estrictions on taking leave that mean some employees don’t always take all the holiday they should creates a risk for affected employees of burnout and lower productivity that has a negative impact on employees and businesses.

Employers should ensure team holidays are spaced out over the year to avoid too many employees being off at one time.

Another operational risk for employers to avoid is payroll errors, especially because employers can no longer calculate holiday pay based on an employee’s basic pay only. It must now include other applicable allowances, including overtime, shift allowances, and commission. Be sure to understand what your staff members’ holiday pay should be.

Considerations for employees to make

For employees, the key consideration is to avoid a seasonal job or career if they want to be able to take a summer or Christmas holiday, because seasonal employers are entitled and more likely to deny these holiday requests.

Employees should take all the annual leave they are entitled to, and ensure they are getting paid correctly, including any extra allowances factored into holiday pay. They should also give their employer extra notice when booking holidays for longer than two weeks.

The pros and cons of annual leave policies

Conclusion

An employer can dictate when an employee takes annual leave, but they must provide notice and a valid reason.

An employee can challenge the refusal if their annual leave request has been denied, but they must have valid grounds to do so. If an employer breaks the rules – for example, by not giving notice for the refusal – the employee can overturn a denied request. If an employer breaches what is in an employee’s contract, they can be taken to an employment tribunal.

HR teams should devise a fair system of holiday allocation, including restrictions that are applied equally to all at busy and crucial times for the business. They should encourage employees to spread out annual leave across the year.

Find out more about the laws around annual leave and holiday entitlement.