Employers have a lot of say over when employees can take their annual leave. In fact, it's (probably) legally OK for a manager to handpick each and every date of annual leave for all their employees.

Of course, this is only the norm in some sectors, for example in education and manufacturing. Most employees might expect to be forced to take holiday when the office is closed over Christmas, but that's about it.

Employers forcing staff to take leave is rarely the biggest annual leave controversy. Instead, there's far more fuss when employers tell staff they can't take leave for whatever reason.

Prioritising leave requests at in-demand times of year is never an enjoyable task — you can't keep everyone happy. We previously looked at how best to deal with issues like this, but sometimes trying to enforce the rules can lead to enormous amounts of paperwork. And by constantly trying to be flexible with your rota and keep employees happy, you may actually be causing more problems than you solve.

That's where leave rules and restrictions come in.

By setting some limits on how and when leave can be taken, you can try to avoid some of these issues — but finding a balance between restrictions and freedom isn't easy.

If you're too strict with restrictions:

  • Employees scramble to book leave as quickly as they can, knowing that they have to move fast or lose out altogether. New starters or those who can't plan leave far in advance are frustrated as they have to take whatever's left over.
  • You constantly have to police every leave request, and check that it follows all the rules.
  • Employees find it tiresome to have to figure out exactly when they can and can't take leave, and the whole process creates extra friction between teams and managers.
  • If employees can't take leave in the manner that works for them, they're more likely to get burnt out (and be less productive and engaged as a result).
  • In the event that employees have loads of leave left to take (because of your restrictions), if they leave the company you'll have to pay the holiday they're owed in one go. This kind of dent in a cash flow can be a real problem for a small business.

But if you're too lenient:

  • You can't guarantee cover during busy periods. Customer service is likely to be compromised.
  • Staff who haven't taken leave face bigger workloads and more stress, and become resentful of their colleagues who have booked leave.
  • It becomes difficult to plan meetings and events if staff can take leave whenever they like, at short notice.

The sweet spot between these two extremes will depend on cultural norms in your country, sector, and company.

Most managers using RotaCloud are actually very generous when it comes to leave requests. Our database shows that from 1st January–20 November 2019 of the 567,824 leave requests that were made, only 3.5% were denied, and a further 2.7% received no response.

In other words, roughly only 1-in-20 leave requests were denied or ignored.

But if you're looking to be a little fussier about leave, there are plenty of ways to apply restrictions fairly.

Here are your options.

1. Leave embargo

What is it?

A blanket ban on leave for a given date or date range. Staff can take time off during these periods only in exceptional circumstances. Embargoes can be applied for the entire company or individual teams or departments.

Leave requests may be automatically or manually declined during this period.

Why?

If trade in your business is very predictable from year to year, you know when you'll be at your busiest. You might as well prevent all staff from booking leave on the days when you know you'll need them.

Should I use it?

Yes. As long as you can justify the embargo with a legitimate business reason, staff should have no qualms about the rule — so long as it applies to everyone.

Are there any best practices?

Apply the embargo as soon as you can — if you know you need everyone in on Christmas Eve, apply the ban before the start of that leave year.

Always explain the reasons behind leave embargoes.

Think carefully about whether or not to cancel any leave already booked before the embargo came into force.

If you use a leave management platform, you can set up requests for this period to be rejected automatically — so long as a message is displayed explaining why. This'll save you a lot of manual work and time explaining why said holiday can't be taken.

2. Minimum staffing levels by role, team and location

What are they?

Leave requests are denied whenever they would take the number of working employees below a minimum level. This can be applied per role, team, or location, depending on the nature of your business.

For example, you could stop any more sales assistants taking time off if you have only two remaining sales assistants scheduled to work during that period.

Why?

Again, this is all about maintaining service levels, and, for some roles, keeping staff safe.

Should I use them?

This policy is common sense for all roles that are customer-facing or have a direct impact on service levels. Again, as long as your restrictions match demand, staff will understand why they're in place.

Are there any best practices?

You should be able to refer to previous years' sales data to link staff availability to changes in demand. Minimum staffing levels should be flexible in teams or roles where demand is just as changeable.

You can reject infringing leave requests automatically, but you also can be a little more forgiving by encouraging staff to arrange a shift swap — so they can still get the time off they're after.

This policy also favours staff who can book leave many months in advance. Staff who can't plan in the same way will always lose out, so consider introducing some sort of rota system for the most in-demand days.

3. Notice periods

What are they?

Staff can't request leave without a specified amount of notice. In the UK, companies will generally require staff to give a notice period at least twice as long as the length of leave an employee wants to take — if they want to book a week of leave, for example, they must request it at least two weeks in advance.

However, employers can apply different rules in employment contracts if they want.

Why?

Last-minute leave bookings can be incredibly disruptive to a business — tasks need to be reassigned, relief staff booked in, and meetings rescheduled. Although companies can reject these holiday requests automatically, having this restriction down in writing sets expectations and limits the number of last-minute requests you receive.

Should I use them?

Yes. Notice periods are one of the few leave restrictions that the UK government mentions on their website, and most staff generally expect these sorts of limits to exist. Formalising them just makes everything clear.

Are there any best practices?

This is one leave rule that it's wise to allow exceptions to. Often staff won't request leave at short notice unless they really have to, and they know their team can manage their workload without them. Leave it up to individual managers to decide whether or not to enforce this rule.

4. Mandatory 1–2 week block of annual leave

What is it?

Common in the financial industry, many companies now require staff to take at least two weeks' leave (or one week) in one go.

Why?

This rule is designed to help firms protect themselves from fraudulent activity, as a two-week enforced absence gives staff more time to identify suspect activity in trading books and makes it more difficult for employees to cover their tracks during this period of leave.

Should I use it?

For roles that have access to company or client books, it may be wise!

Are there any best practices?

Given the amount of remote working in today's working world, have a system in place that prevents remote access, too.

5. Maximum notice

What is it?

Leave requests for a specified day or period can't be made any sooner than x months before. For example, leave requests for Q4 2020 can't be made until Q2 2020. This restriction is much rarer than the minimum notice periods we discussed above.

Why?

There are several reasons why companies or teams might enforce these rules. First, it prevents the same employees snapping up leave early each year. Second, it gives teams the opportunity to more accurately predict demand/required service levels for that leave period, reducing the chance that you'll have to cancel booked leave.

Should I use it?

Generally, we wouldn't recommend enforcing this rule. It's almost always more helpful for employees to book leave as far in advance as possible, so you can plan around it more easily. However, you'll need to work on a system for rotating leave for in-demand times of year, so the early birds don't always get Christmas off!

Are there any best practices?

Again, explain the reasoning behind this decision, because it can be hugely disruptive — particularly for families who want to book holidays early to get the best deals.

6. Limit (or ban) leave carry-over

What is it?

Employers can restrict or outright ban the practice of carrying over extra leave to the next leave year. There's no legal requirement for employers to allow leave to be carried over, but some contracts allow it, and it may be expected in plenty of office environments.

Why?

Carrying over leave increases the employees' leave allowance for next year, potentially ruining your carefully laid staffing plans — you may simply be required to hire more staff just to cover all that extra annual leave. And by letting staff carry over plenty of leave with few restrictions, some employees will simply 'bank' leave so they can take more time off next year — at the expense of their stress levels this year.

Should I use it?

Yes, you should restrict leave carry-over. It's pretty much expected that there will be some limits on carry-over, and by overdoing it, staff can put their health — and that of the business — at risk.

However, not allowing carry-over at all may be seen as a bit draconian in many sectors, particularly for office workers.

Are there any best practices?

Generally there are two ways to restrict carry-over: allow only a couple of days to be carried over, and require all the carried over leave to be taken within the first 1–2 months of the new leave year. You might also want to think about carry-over on a case-by-case basis. Whatever you decide, write it down as a company policy, and apply it consistently.

7. Mandatory leave

What is it?

Specified days or date ranges where employees must take annual leave.

Why?

The office or workplace will be closed for Christmas, other bank holidays, or a planned shutdown, so staff can't work their normal jobs. It's perfectly legal (and normal) for companies to require staff to take annual leave during these periods.

Should I use it?

Yes, if you plan to close your workplace during the year.

Are there any best practices?

Give as much notice as possible for any mandatory leave — preferably bringing it up at the start of the leave year.

You can also give staff the mandatory leave for 'free', and not take this leave off their allowance.

Automated vs. manual restrictions

Enforcing all these rules and restrictions can be a lot of work, particularly if you manage leave through a spreadsheet or simply on paper.

If you use a leave management system (whether as part of your rota software or HR software), it's easier to apply these rules — and even do so automatically.

For example, you can automatically deny leave requests if they'll take an employee over their leave allowance for the year.

It's best to be a bit careful with these automated rejections — there will always be occasions where your normal rules don't need to apply, and employees will appreciate some flexibility. Make sure you give employees a route to appeal automated rejections, even if it's just asking their manager the old-school way.

Wrap-up

An annual leave free-for-all has winners and losers — and if you're not careful, your business could be one of the latter. Applying some restrictions is common sense — just make sure you work towards that perfect balance between protecting the business and giving employees plenty of flexibility over their working lives.