Refusing an annual leave request: the ultimate guide

Allocating annual leave to employees can be a challenge for businesses. Employers must match their business’s needs and meet customer expectations while complying with the statutory legal requirement to provide employees with the leave they’re entitled to.

However, employers do have discretion to refuse an annual leave request for specific dates in certain circumstances, provided the decision does not violate what’s in an employee’s contract and the employer provides the correct notice period.

This article will explain the circumstances under which an employer can and cannot refuse an annual leave request, the rules employers should follow, what laws employers risk breaking when refusing annual leave requests, and whether an employer can cancel a previously agreed annual leave request.

Can an employer refuse an annual leave request?

Under UK employment law, an employer has the right to refuse a holiday request, but they must have a good reason. There are many examples of valid reasons why an employer can refuse annual leave.

Refusals are usually linked to the nature of the work and the sector an employee works in. For example, teachers can only take annual leave outside of school term time.

Certain sectors, such as hospitality, can have restrictions on when annual leave is taken in the year. Holiday ‘blackouts’ can be imposed during Christmas and New Year or the summer holidays, when hospitality businesses earn the bulk of their revenue.

That said, all employers can refuse a request if:

• The requested dates fall during a busy period
• Certain staff are needed to complete a project by a deadline
• Approving the request could lead to understaffing

In some circumstances, a business can limit annual leave, granting some days but denying others. An employer can also impose limits on when annual leave is taken to ensure that essential parts of the business can function.

“Employers can turn down holiday requests,” said Emma Cromarty MCIPD, an independent HR practitioner.

“Their policy may state it has a first come first served basis or that only a certain number of staff can be off for at the same time, for example. Employers can deny leave if it conflicts with peak business periods, staffing requirements, or critical project timelines.”

Other types of leave, such as maternity leave, cannot be refused as long as affected employees follow the rules governing them.

Under what circumstances can an employer refuse an annual leave request?

Employers should provide a valid business reason to an employee for denying them an annual leave request on a specific date, and give them notice equal to the amount of leave requested.

Similarly, employees must follow company policy when requesting annual leave. “If the employee has not followed provided guidelines for requesting annual leave, there will need to be a special circumstance such as bereavement or emergency,” said David Rice, HR expert at People Managing People. “Otherwise, the business is within its rights to respectfully refuse it.”

An employer can also refuse a holiday request if it will have a material impact on the employer’s ability to run the business effectively. Justifiable grounds in this instance include:

• If the holiday would lead to staff shortages
• If the holiday means a vital customer deadline would be missed
• If the holiday is during peak season

Employers can also refuse an annual leave request if an employee does not have enough entitlement left in the applicable holiday period to take it. If staff have used up more leave than they have accrued and leave the company, an employer can deduct the difference from their final pay.

When is it illegal for an employer to refuse annual leave?

It is illegal for an employer to repeatedly deny annual leave requests to the extent that an employee can’t take the statutory amount of holiday they are entitled to in the holiday year. This is usually 28 days for a full-time equivalent staff member, including bank holidays.

If an employer prevents an employee from taking their statutory holiday, they may be breaching a worker’s employment contract and could be taken to an employment tribunal.

Refusal of annual leave requests should only be made in good faith and for valid reasons – namely to ensure the smooth running of the business to meet its deadlines.

If an employer denies annual leave to staff without providing the correct notice period (which we’ll explain in more detail in the next section) or without a valid business reason, they could be breaching the Working Times Regulations 1998 Act, and the affected employee is entitled to raise a complaint.

The Act also makes it mandatory for employers to pay employees for their annual leave. Failure to do so could give employees a valid reason to bring an employment tribunal claim for unlawful deductions from wages.

What rules should an employer follow when deciding?

Employers are not legally obliged to explain to staff why they have refused a holiday request, but it’s good practice to do so, because it helps maintain staff morale and supports an employer’s position should there be a dispute.

Fair and transparent annual leave policies should be part of a wider business HR and organisational culture strategy to reduce friction between managers and workers, and ensure the business operates effectively.

Annual leave rules should be documented in individual employment contracts and in a staff handbook. Reasons why annual leave could be refused should be outlined here, to prevent disputes caused by ambiguity or poor communication.

Employers must ensure they handle staff annual leave requests fairly, consistently, and in compliance with employment law, otherwise it could be seen as discrimination and lead to legal issues.

“Having a fair, transparent process for reviewing leave requests is important,” said HR consultant Conor Hughes.

“If you do deny someone, give them a solid rationale and an alternative. Employees can legally challenge rejected requests if they feel it was unfair or discriminatory. An ounce of prevention through open communication is worth a pound of cure, as they say.”

When requesting annual leave, employees need to give their employers enough notice – this should be at least twice the amount of time of the total length of the holiday period.

The regulations state that employers must also provide notice of a refusal of an annual leave request. This notice period should be at least equal to the number of days the employee requests.

Can an employer cancel a previously agreed annual leave request?

An employer can cancel an already-approved holiday request in certain circumstances, if there is a business need. For example, if a business wins a new major order with a tight deadline that requires extra or specific staff to complete it, the company can justify cancelling annual leave to ensure the order is completed.

Conditions apply when a business cancels a holiday request that has already been approved:

• The employer must give the employee notice of at least the same number of days of the cancelled leave request, plus one day
• The employer cannot cancel the leave request if it means the employee will be unable to use all of their statutory leave entitlement during the annual leave year

There can be circumstances when an employer may consider cancelling an employee’s holiday that has already been approved. This could be due to a tight deadline, staff absences or an important new project that must be completed quickly.

Employers should tread carefully in these situations, as cancelling a holiday request that’s already approved can have a huge impact on the affected employee’s morale and loyalty to the employer, particularly if they’ve already paid for their holiday. Therefore, this should only be done if there’s no other option available.

Conclusion

Employers can refuse annual leave requests under specific circumstances. These are clearly indicated by employment law and, when applied correctly, should allow a business to refuse annual leave requests transparently, for reasons that can be explained to the affected employees to reduce bad feeling and disputes.

Employers must allow employees to take the annual leave they are entitled to. This means it is best practice to adopt a clear, fair annual leave policy that encourages staff to spread out leave across the year and avoid busy periods for seasonal businesses.

“The happiest, most productive teams are ones that get to properly recharge their batteries,” added Hughes.

Find out more about all aspects of holiday entitlement and employment law.

Benjamin Salisbury - business journalist

Benjamin Salisbury is an experienced writer, editor and journalist who has worked for national newspapers, leading consumer websites like This Is Money and MoneySavingExpert.com, business analysts including Environment Analyst, AIM Group and written articles for professional bodies and financial companies. He covers news, personal finance, business, startups and property.