Annual Leave – Planning For the End of the Annual Leave Year

As we are now approaching the end of the calendar year, if your holiday year runs from 1 January to 31 December, we recommend that you review the annual leave position for your employees.

Annual leave is for rest and recuperation from work, and the rules that govern this are the Working Time Regulations 1998 and The Working Time (Amendment) Regulations 2007. These rules were originally based on the EC Working Time Directive, which has been amended from time to time. We need to keep an eye on future changes following Brexit.

As it is now only three months to year-end, planning a holiday makes it easier to ensure that your organisation is still staffed to meet its needs.

Many organisations close their doors during the holiday period in December, and it is a good idea to remind staff of the plans over this period.

What you need to do now

You will need to work out how much annual leave each employee still has left to book and take before the end of the year.

Remind your employees to book and use their full annual leave entitlement within the leave year.  Explain that leave is very important for health and wellbeing, as well as allowing them time to relax away from the workplace.

Advise your staff in good time of any policies or contractual obligations if any leave may be carried over to the next annual leave year, or if any untaken leave will be lost.

Written communication to staff is advisable so that it is clearly stated what needs to be done in the next three months.

When can holiday be carried over?

There are a number of reasons why a holiday can be carried over to the next holiday year. These include:

  • During the COVID-19 pandemic, the government relaxed the carry-over restrictions. If a worker was unable to take leave, they could carry over and use that holiday over the next 2 leave years;
  • When on statutory maternity or adoption leave – note that annual leave cannot be taken at the same time that staff are on maternity or family leave;
  • When on long-term sick.

It is important to refer to the employment contract or company policies regarding the taking of holiday, especially where the annual leave entitlement has been enhanced. Organisations may allow for carry-over of a portion of the enhanced holiday entitlement, provided the statutory entitlement has already been taken.

Can you pay in lieu of untaken holiday?

There are times when employees have not taken their full entitlement during the holiday year and ask if they may be paid instead.

It is unlawful to pay in lieu of untaken holiday, unless on termination of employment.

Can you request your staff to take holiday?

An employer may request staff to take holiday if it is convenient for their organisation. However, we would recommend that contracts or policies be checked as well. If a request is made to an employee to take holiday, notice must be double the amount of time that is requested to be taken.


Annual holiday is an emotive subject. It is important to keep accurate records of holiday taken and holiday accrued. It is recommended that regular conversations take place around well-being which includes time off such as annual leave.


If you would like to discuss this subject further, please contact Cecily Lalloo at Embrace HR Limited.

T: 01296 761288 or contact us here. 

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Based in Aylesbury, Buckinghamshire, Embrace HR Limited provide a specialised HR service to the care sector, and small businesses, from recruitment through to exit.