Managing annual leave (& carry-over requests)

Businesses running their annual leave calendar from Jan-Dec may now be receiving employee requests to carry over unused leave into 2023. This has implications for both the business and employee.

First-stop should be the employee contract. Check annual leave clauses, but if there is no mention of carry-overs then we’d suggest considering the following:

• How much leave will be carried over? If it is only a few days and if there is sufficient employee cover in the new year then approval is easier to justify and employees will appreciate the flexibility.

• Are there valid reasons why leave needs to be carried over? (eg. long-term sickness, maternity leave or business demands generally). Approvals should be weighted by reason.

• There may be budgetary implications where unused leave which has been carried over then becomes monetised if the employee subsequently leaves the organisation. Large amounts of unused leave could equate to £££ for small businesses.

Businesses could look to:

1. Cap the expiry date for unused leave, eg 31 March or say 50% by end Feb and 50% by end Mar/other to suit work pipelines. Capping can help avoid a bottleneck of staff competing to take lots of unused leave and potentially impacting production further down the line.

2. Align cyclical patterns of the organisation with carry-overs, eg. retailers/manufacturers may welcome requests to carry over leave into the new year, so they have as fully manned workforce as possible during the period leading up to Christmas.

3. Introduce non-standard leave dates for all new joiners, eg. rather than the usual 1 Jan-31 Dec, instead start the leave period from the month employees join the organisation, eg. 1 May-30 Apr.

4. Consider digital monitoring of annual leave. Review all leave data at regular quarterly intervals with auto-alerts on any large amounts of unused leave.

5. As a last resort, businesses may adopt a “use it or lose it” approach to unused leave. However, this could certainly affect employee engagement and morale and we would always favour a healthy conversation to avoid negatively impacting the workforce.

To avoid burnout, it’s important that employees take their full quota of annual leave.

This may be trickier for those in higher-powered, more autonomous roles which may not afford as much flexibility (ie. if they don’t do the work then it won’t get done at all). As above, we’d suggest regularly monitoring leave data to avoid burnout and, as we always urge, keep lines of communication open with your employees.

When your employees do take their annual leave, encourage them to switch off completely.

Urge them to turn off their work WhatsApp and email notifications and avoid contacting them.​

Employees who are well rested on their return to work are more likely to be happier, motivated, and much more productive!​