An employee handing in their notice can be a particularly challenging time. It can be disappointing to lose a colleague you’ve built up a relationship with, and they’re probably an experienced and valuable asset to your team.
Then there’s the inevitable questions around their holiday entitlement:
Have they taken more than they’re now entitled to? Do they have any more left to take? Can they demand to use that holiday entitlement to finish before their notice period ends? Can you force them to take un-used entitlement before they leave?
Let’s tackle each of them:
Have they taken more than they’re now entitled to?
Some businesses don’t allow their employees to take holiday until they’ve accrued it, but most businesses have no such restriction.
This is fairer on employees and makes it easier to manage, but when an employee hands in their notice, there’s always a chance they’ve taken more holiday than they’re entitled to.
If that’s the case, then you can take those extra days from their final pay, but ONLY if it’s been agreed in writing! That means documenting it in their employment contract.
Do they have any more left to take?
The more common scenario is that an employee still has days left to take. In this case, either the employee takes the leave, or you pay them for those days, or a combination of both.
This is true even if you’re sacking them for gross misconduct – you’ll still have to pay them for any outstanding holidays.
Where this differs is if you offer your employees more than the statutory minimum – we reached out to Duncan Urquhart from NDL-HR to ask if the same rules apply to the additional days – his response:
“An employer can offer more paid holiday than the legally required minimum of 28 days (UK). However, the employer does not have to apply all the rules that apply to statutory holidays to the extra holidays.”
Can they demand to use their remaining holiday entitlement to finish before their notice period ends?
Yes. If an employee has holiday entitlement left to take, and they give reasonable notice (or abide by the specific notice set out in their contract), then they can request to take those holidays. However, you can refuse the request for valid business reasons.
As an example: Gary’s notice period is a week, and he has a week’s worth of holiday to take. However, you need him to hand over the ropes to another employee, then you’re probably within your rights to refuse him taking the whole week.
If his notice period is a month and he only has a few days to take, then it’s difficult to see a valid business case for refusing the request.
Can you force them to take un-used entitlement before they leave?
Yes. The Working Time Regulations allow you to specify the dates that an employee must take their annual leave, providing you give them suitable notice.
The minimum notice is the number of days you want them to take, in advance of them taking it. For example: if you want them to take five days’ holiday, you have to give them five days’ notice.