Can I use my holiday entitlement during my notice period?

A common question employers face when an employee is leaving the workplace is, ‘Can I use my holiday entitlement during my notice period?’ While losing a team member can be challenging, especially after investing in their growth, it’s important to understand the guidelines around holiday entitlement during this time.

Before addressing questions about annual leave, it’s important to know how much holiday an employee has taken and how much they have remaining. Some staff might not use their full holiday entitlement, so it’s crucial to check their remaining leave and determine if you can require them to use it during their notice period. It is in situations like this, that the Holiday Tracker can prove very helpful.

Managing leave during notice period

Handling leave during an employee’s notice period requires careful management to ensure a smooth transition and minimal disruption to business operations. During this time, it is crucial to clearly communicate and enforce company policies regarding leave requests. 

Employees should be informed about any restrictions or procedures for requesting time off, as well as any impact their absence may have on the handover process. 

Utilising a structured approach, such as tracking leave through a dedicated system, helps in planning workloads and ensuring that critical tasks are covered. By balancing fairness and operational needs, businesses can manage leave requests effectively while maintaining productivity and supporting employees through their transition.

The Notice Period Explained

A notice period is the time required before an employment relationship ends, giving both parties time to prepare for the transition. It helps employees secure new roles and allows employers to plan for the employee’s departure, ensuring a smooth handover and continuity of work.

But, who is responsible for what?

• Employee: Complete ongoing work, provide a thorough handover, and adhere to company policies regarding leave during the notice period.
• Employer: Facilitate a smooth transition, and respect entitlements, including handling any accrued holiday leave appropriately.

Have they taken more than they’re now entitled to?

Your business might require employees to accrue holiday time before taking leave. However, many companies adopt a more flexible approach, allowing staff to take holidays as needed.

The risk with this approach is that when an employee hands in their notice, there’s a chance they may have taken more holiday than they were entitled to at that point in the year.

You can reclaim this time from the final pay if documented in writing. Ensure your employment contracts are current and specify that any excess holiday taken will be deducted from their final pay.

Do they have any more left to take?

However, it’s often the case that employees have remaining holiday leave. In such situations, you can either have the employee take the leave, compensate them for those days, or use a combination of both.

If you are terminating employment, you will still need to pay any outstanding holiday entitlement.

Where this differs is if you offer your employees more than the statutory minimum. As Duncan Urquhart from NDL-HR explains: “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.”

Potential Problems and Solutions

Managing annual leave during an employee’s notice period can be challenging. Balancing the needs of the business with the rights of the employee requires clear policies and effective communication. Here are some common scenarios and practical solutions to handle them efficiently.

Resolving Conflicts Between Leave Requests and Business Needs

Prioritise Business Needs: Use a leave management system, such as The Holiday Tracker, to monitor who else is off and ensure critical functions are covered before approving leave requests. This helps maintain business continuity.

Temporary Staffing: Consider hiring temporary staff or redistributing tasks among team members to maintain productivity during leave periods. This ensures smooth operations even when key employees are on leave.

Handling Entitlement Exceeding Notice Period

Pro-Rata Calculations: If an employee’s holiday entitlement exceeds their notice period, calculate the pro-rata entitlement and offer payment for any excess leave. This ensures fairness and compliance with employment regulations.

Combining Leave with Notice Period: Allow the employee to take their remaining leave during the notice period, provided all necessary tasks are handed over beforehand. This helps in maintaining productivity while respecting the employee’s entitlement.

Flexibility and Negotiation: Balance the needs of both the employee and the business by allowing partial leave and offering payment for any extra days. This approach ensures both parties are satisfied and helps in maintaining a positive work environment.

By implementing these solutions and maintaining clear communication, you can manage leave requests during notice periods effectively, ensuring a smooth transition for both the employee and the business.

Tracking Holiday Entitlement

As an employer, the best approach is to track holiday entitlement monthly, ensuring your staff use their leave throughout the year. By monitoring holidays, you’ll minimise the risk of employees taking too much or too little time off and can better plan for your business needs.

How The Holiday Tracker Can Help

The Holiday Tracker makes managing leave simple and stress-free for everyone involved. Here’s how:

1. Easy Request Submissions: Employees can quickly submit their holiday requests through our easy-to-use platform. Approving or denying requests is just a few clicks away, saving time for managers and staff.

2. Automatic Entitlement Calculations: Our system handles all the maths for you. It automatically calculates holiday entitlements, even if an employee starts mid-year or changes their working hours. This mean we take on the responsibility, saving you any additional stress.

3. Customisable Options: Need different types of leave? No problem. You can add up to 12 leave types, including flexi leave, sabbatical leave and compassionate leave, to fit your company’s needs.

4. Better Coordination: Our team calendars and notifications keep everyone in the loop. Employees and managers can easily see who’s away and plan accordingly.

With The Holiday Tracker, managing leave becomes straightforward and efficient, helping your team stay organised and focused on what matters most. 

Why not try a 7 day free trial today and see exactly how The Holiday Tracker can help your workplace?