Refusing an employee’s annual leave request

We all value our holidays immensely, and rightly so - we’ve worked hard and need some time to recharge our batteries. As an employer, you can refuse an employee’s annual leave request if there is a legitimate business reason, such as a staff shortage or it being a peak business period. However, you cannot prevent them from taking their statutory annual leave altogether.

Many employers are reluctant to refuse or cancel annual leave requests, while many employees are unaware that employers are often entitled to do so.

Setting clear annual leave rules

It is your responsibility to ensure your rules surrounding annual leave are set out in your employee handbook, policy or contract. This should explain how much notice employees need to provide, the process for requesting annual leave (but more importantly how it needs to be approved) and how many consecutive days they can book at one time. 

If we could earn £1 for every query we’ve had where an employee has booked a holiday before seeking approval, we would be rich. This has caused friction within teams, sleepless nights for managers and usually due to unclear procedures and the implications for not following them.

You should also note the maximum number of employees who can be off at any one time and that you reserve the right to refuse or cancel annual leave where required.

Refusing annual leave requests 

There can be many reasons why you might refuse an annual leave request, but the most common is too many staff members requesting the same period of leave at one time. This could leave you short staffed and therefore with your business’ needs not being met.

As an employer, you are also able to dictate when annual leave cannot be taken, for example during particularly busy times of the year, and you can also insist that annual leave is taken at a certain time of year, for example if you close at Christmas, you can make it policy that employees must allocate a set amount of days of their annual leave in order to cover the closure.

To refuse an annual leave request you must give your employee counter notice equivalent to the period of leave they requested. For example, if they tried to book a week off, you must refuse the request at least a week before their leave was due to commence.

Cancelling previously approved annual leave

It is possible to cancel annual leave that has already been approved, but this should only be done when there is a legitimate business reason. We’d recommend only doing so as a last resort, when all other options have been exhausted, as cancelling leave at short notice can have a significant impact on employees, particularly if they have already made travel arrangements or incurred costs.

If there is no other option but to cancel an employee’s approved annual leave, you must give them notice that is at least equivalent to the amount of leave they were due to take. For example, if they were due to take five days annual leave, you must give at least five days notice of the cancellation.

Having a clear annual leave policy that explains when leave may be refused or cancelled, and ensuring all employees understand it, can help manage expectations, reduce disputes and protect your business.

We provide HR services for SMEs, so if you're unsure whether you can refuse or cancel an employee’s annual leave, just get in touch.