MAKE YOUR FREE Annual Leave Policy
What we'll cover
What is an Annual Leave Policy?
When should I use an Annual Leave Policy?
Use this Annual Leave Policy:
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if you or your business employ staff in England, Wales or Scotland
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to ensure that staff know when they can take annual leave and how to request it
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to explain staff members’ holiday pay entitlement
Sample Annual Leave Policy
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ANNUAL LEAVE POLICY
Purpose of the Annual Leave Policy
- (‘we’ or ‘our’) recognise the right of our staff (‘you’ or ‘your’) to take paid annual leave each year. We believe that it is important for you to rest and we strongly encourage you to make use of your annual leave entitlement.
- The purpose of this Policy is to ensure that both staff and managers are clear on the entitlements, rules and processes surrounding your annual leave entitlement. If you have questions about the contents of this Policy, please contact.
- This Policy applies to all employees, irrespective of seniority, tenure and working hours, including all directors and officers, casual or agency staff, trainees, interns, fixed-term staff and workers (our ‘staff’). It does not apply to self-employed contractors.
- Some of the entitlements and rules in this Policy summarise statutory rights. If any statutory rights change and become inconsistent with this Policy, we will amend the Policy to reflect these changes.
- This Policy is not part of your contract of employment and we may amend this Policy at any time, at our absolute discretion.
Annual Leave Entitlement
- Our annual leave year runs from to .
- You are entitled to days of annual leave per year pro rata (your ‘annual leave entitlement’).
- Your annual leave entitlement is the paid time off that you are entitled to. You may request additional unpaid time off, which may be granted entirely at the discretion of.
- Your annual leave entitlement will continue to accrue while you are on any family leave (i.e. parental or adoption leave) or sick leave.
Requesting Annual Leave
- Annual leave is recorded . Requests for annual leave should be made.
- You should ensure that your annual leave requests are approved before booking a holiday. We are not liable for any loss incurred by you if you incur costs and make commitments prior to receiving approval.
- If you take annual leave without approval we may take disciplinary action against you.
- Please note that has the right to refuse your annual leave request, taking into consideration business needs, the high volume of annual leave requests received at certain times of year (e.g. school holidays), and the notice provided.
Holiday Pay
- You will be paid your regular pay during any annual leave time that you take. If you work a shift pattern or irregular hours (i.e. a different number of hours each week), your holiday pay will be worked out based on the average number of hours per week worked during the preceding 52 weeks.
- If you are regularly paid a commission, bonuses, or overtime, an average of the amount you receive from these payments will be added to of your standard holiday pay.
Illness and Bereavement During Annual Leave
- If you become ill during your annual leave, you may reallocate your leave as sick leave by following our usual policies and procedures for sickness. Any time reallocated as sick leave will be added back onto your annual leave entitlement. To use this time, you should request new annual leave following the ordinary procedures outlined in this document.
- If you reallocate your annual leave as sick leave, you will be paid according to our usual Sickness Policy.
- A copy of our Sickness Policy is available.
- If you experience a bereavement during your annual leave, you may reallocate your leave as bereavement leave if you are entitled to such under our usual Bereavement Leave Policy. Any time reallocated as bereavement leave will be added back onto your annual leave entitlement. To use this time, you should request new annual leave following the ordinary procedures outlined in this document.
- If you reallocate your annual leave as bereavement leave, you will be paid according to our Bereavement Leave Policy.
- A copy of our Bereavement Leave Policy is available.
Requiring Staff To Take Annual Leave
- We may require you to take annual leave at a certain time, for example, if we decide to close the business for a period. In such situations, we will give you at least twice as many days’ notice as the amount of annual leave days that we require you to take (e.g. 10 days’ notice for 5 days’ annual leave).
When Annual Leave Can Be Taken
- Annual leave may be taken at any time during the annual leave year, subject to the discretion of.
- Annual leave be taken immediately before or after family (i.e. parental or adoption leave) is taken (i.e. it may be added onto your family leave).
- If you intend to take annual leave immediately before or after family leave, you should discuss this with when you arrange your family leave.
Bank Holidays
- Time off for bank holidays.
Carrying Over Annual Leave Entitlement
- Wherever possible, you should use your full annual leave entitlement for each annual leave year within that year. If you do not,.
- You may carry over unused annual leave entitlement if you are unable to use your full entitlement within the annual leave year due to being on long-term sick leave, or because you have taken family (i.e. parental or adoption) leave at a time which prevents this. Any annual leave carried over for these reasons must be used within 18 months of the date that it is carried over.
- If you are unable to use your full annual leave entitlement within an annual leave year due to being sick with Covid-19, or because you were required to keep working due to Covid-19, you may carry over of your entitlement for use within the following two annual leave years.
Ending Employment
- When you end your employment, you will receive pay for any remaining annual leave entitlement in your final pay. However, we may require you to use any remaining entitlement during your notice period.
- If, when you end your employment, the amount of annual leave you have taken exceeds the entitlement that you have accrued to that date, we may subtract the amount in excess from your final pay.
Attribution
- This Annual Leave Policy was created using a document from Rocket Lawyer (https://www.rocketlawyer.com/gb/en).
About Annual Leave Policies
Learn more about making your Annual Leave Policy
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How to make an Annual Leave Policy
Making an Annual Leave Policy online is simple. Just answer a few questions and Rocket Lawyer will build your document for you. When you have all of the details prepared in advance, making your document is a quick and easy process.
To make your Annual Leave Policy you will need the following information:
Business details
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What is the employer’s name?
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Who is responsible for decisions about staff members’ annual leave?
Annual leave
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When does the annual leave year start?
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When does the annual leave year end?
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What is staff members’ holiday entitlement?
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Are bank holidays additional to or included in the holiday entitlement?
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If bank holidays are additional, can alternate days be taken off instead of a bank holiday?
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If bank holidays are included, do they need to be taken off work?
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How much notice must staff members give when requesting annual leave?
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How must staff members request to take annual leave?
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Where is information about annual leave entitlements recorded?
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Will any commissions, bonuses or overtime that staff members receive be added onto all of their holiday pay?
Other types of leave
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Where can staff members get a copy of the employer’s sickness policy?
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Does annual leave entitlement continue to accumulate whilst staff members are on bereavement leave?
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Where can staff members get a copy of the employer’s bereavement leave policy?
Required leave
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Are staff members required to take annual leave at a certain time? If so, when must staff members take annual leave?
New staff members
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Will annual leave be approved for holidays arranged before a staff member starts work for the employer?
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Are new staff members required to work for a certain period before taking annual leave?
Unused annual leave
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Can staff members carry over any unused annual leave entitlement for reasons other than those allowed by law? If so:
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How much annual leave entitlement can be carried over?
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By when must staff members use their carried-over annual leave entitlement?
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Can staff members receive payment instead of any such carried over leave?
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Common terms in an Annual Leave Policy
An Annual Leave Policy sets out a business’ approach to holiday entitlements and holiday pay. As a result, this Policy template covers:
Purpose of the Annual Leave Policy
This section provides a basic overview of the Annual Leave Policy and sets out why the Policy is being adopted by the employer. It also clarifies to whom the Policy applies and that it is non-contractual and can be amended by the employer at their discretion.
Annual leave entitlement
This section details the employer’s leave year and annual leave entitlement. It also clarifies the circumstances in which annual leave continues to accrue when a staff member is not working (eg because they are on family leave).
Requesting annual leave
This section sets out how a staff member can request annual leave (including how much notice they must give). It also explains when the employer can reject a holiday request.
Holiday pay
This section sets out that staff members will receive their regular pay when they take annual leave.
Illness and bereavement during annual leave
This section details what happens if a staff member becomes sick or experiences bereavement while on annual leave. It explains how annual leave can be reallocated as sick or bereavement leave.
Requiring staff to take annual leave
This section sets out when the employer may request that a staff member takes annual leave. It also sets out how much notice the employer must give staff members to do so.
When annual leave can be taken
This section sets out when staff members can take annual leave and who such arrangements should be made with.
Bank holidays
This section sets out how bank holidays relate to the annual leave entitlement (ie whether they are included or excluded from the annual leave entitlement). Where relevant, this section will also set out whether an alternate day can be taken off instead of a bank holiday.
Carrying over annual leave entitlement
This section encourages staff members to take their full annual leave entitlement within a given leave year. It then explains how any unused leave will be treated (ie when unused leave can be carried over).
Holidays arranged before employment commences
If relevant, this section will set out how any holiday arranged before a staff member was hired by the employer will be treated.
Ending employment
This section details what happens to annual leave entitlements when a staff member stops working for the employer.
You can edit your document if you want your Annual Leave Policy to include further or more detailed provisions. However, if you do this, you may want a lawyer to review or change the Policy for you, to make sure it complies with all relevant laws and meets your specific needs. Ask a lawyer for assistance.
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Legal tips for making an Annual Leave Policy
Make sure you comply with the commitments made in the Policy
Staff members are entitled to take annual leave and employers should encourage staff members to take their annual leave. By making an Annual Leave Policy, employers take an important step towards encouraging staff to take holiday. However, simply having a Policy in place is not enough. Employers should take physical steps to implement the Annual Leave Policy and to bring it to the attention of their workforce. Employers should also ask managers to encourage staff members to take their annual leave.
Consider the other types of leave for which you should adopt workplace policies
Annual leave is one type of leave to which staff members are entitled. Depending on a staff member’s employment status (eg whether they are a staff member or a worker) they may also be entitled to other types of leave. As an employer, it is prudent to have relevant leave policies in place to outline and clearly communicate such leave entitlements. Examples of other policies you may consider adopting, include:
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a Maternity leave policy, informing staff about their right to maternity leave
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a Paternity leave policy, informing staff about their right to paternity leave
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a Shared parental leave policy, informing staff about the shared parental leave system
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a Parental leave policy, informing staff about their right to (unpaid) parental leave
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a Bereavement leave policy, setting out your approach to bereavement leave and pay
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a parental bereavement leave policy, setting out the right for some staff to take time off when they lose a child. Ask a lawyer if you need a parental bereavement leave policy
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a Time off for dependents policy, setting out the right to unpaid time off to assist dependants if they’re involved in sudden or unexpected emergency situations
For more information, read HR policies and procedures.
Understand when to seek advice from a lawyer
Ask a lawyer for advice if:
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you employ agency workers or contractors and you are unsure what annual leave they are entitled to
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you want to set different annual leave rules for different staff members
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this Policy doesn’t meet your needs
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Annual Leave Policy FAQs
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What is included in an Annual Leave Policy?
This Annual Leave Policy template covers:
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how much annual leave staff are entitled to and how annual leave entitlement accrues
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the process for requesting annual leave
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when annual leave can be reallocated as bereavement leave or family leave (ie parental or adoption leave)
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when annual leave can be taken
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whether annual leave can be carried forward into the next annual leave year
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rules for taking annual leave near the start of employment
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Do I need an Annual Leave Policy?
Employers are legally required to let staff members take at least 5.6 weeks of paid holiday per year (this may include bank holidays). This is calculated in proportion to the hours actually worked by a staff member (ie pro rata). This holiday entitlement also applies to staff who work casual or irregular hours. Therefore, you should make sure that you have an Annual Leave Policy in place if you employ anybody.
It is important that staff are encouraged to use their full annual leave entitlement (ie all the days of annual leave that they are allowed) so that they can rest. By adopting an Annual Leave Policy and making your staff members aware of it, you encourage staff to take holiday.
For more information, read Employee holidays and How to calculate holiday entitlement.
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How can I implement an Annual Leave Policy?
You can make an Annual Leave Policy using this template. You can then download and print or digitally store your Policy. You should ensure that all staff members know about the Policy and know where they can get a copy of it. If you have a staff member handbook, you should include your Annual Leave Policy in it.
You should also ensure that staff know who to talk to if they have any questions or concerns about annual leave.
If you do not have a staff member handbook, you can make one using this our template Employee handbook.
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How much annual leave are staff entitled to?
Under The Working Time Regulations 1998 and associated laws, workers and employees in the UK are entitled to at least 5.6 weeks of paid holiday per year (pro rata). For full-time workers, this means 28 days. For part-time workers, this is calculated in proportion to the number of hours they work. Employers can choose to offer their staff members more than 28 days of paid holiday.
Employers can also decide whether staff can take bank holidays off in addition to their annual leave entitlement. In England and Wales, there are usually 8 bank holidays per year. In Scotland, there are usually 9.
For more information, read How to calculate holiday entitlement and Bank holidays and the law.
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Are all staff entitled to annual leave?
Full-time, part-time and casual staff with ‘worker’ or ‘employee’ status are entitled to paid holiday. Businesses are not required to give self-employed contractors annual leave and holiday pay.
For more information about the status of staff members, read Consultants, workers and employees. If you need help determining a staff member’s status, you can Ask a lawyer.
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What happens if staff members do not use their annual leave entitlement?
If a staff member is unable to use their whole entitlement during the relevant annual leave year they may be able to carry over (or ‘carry forward’) some of their entitlement to use in the next annual leave year(s).
The law gives staff members a right to carry over leave in certain circumstances. For example, if they were unable to take it within the relevant leave year because:
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they were on sick leave
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they took certain types of statutory leave (eg maternity, paternity, or adoption leave)
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their employer made certain failures related to the staff member’s annual leave entitlement (eg they haven’t recognised their right to take this holiday leave)
For more information, read Employees’ and workers’ holidays.
Employers can allow staff to carry over annual leave entitlement for other reasons too, for example, because they wanted to finish work on a particular project before taking annual leave.
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What happens at the end of employment?
If a staff member has unused annual leave entitlement when they finish their employment with you, they must be paid any remaining holiday pay they are entitled to when they leave. Alternatively, employers can require the staff member to use their remaining entitlement during their notice period.
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