Whether it’s extending a long weekend or a month visiting dream destinations around the world, everyone looks forward to taking a much-needed break.
But what happens if there’s an unbelievable travel deal to those dream destinations and your employee pre-books it now and applies for annual leave later?
If the pre-booked holiday isn’t for several months and the dates don’t conflict with any blackout period stipulated in their employment agreement, approval should not be an issue. If the notice is short, conflicts with the approved leave of other employees, or is in a blackout period, you may have to make the hard decision of denying their leave application.
When can I refuse an annual leave request?
Annual leave can only be taken at a time agreed upon by you and your employee. Many employees are surprised to learn that under the Holidays Act 2003, you can refuse an employee’s annual leave request if there is a legitimate business reason.
Keeping accurate records is important if you deny an annual leave request. They detail why the decision was made and how you informed your employee. If the matter is escalated to a personal grievance claim, this record can serve as evidence why the denial was considered reasonable.
If you’re interviewing a potential new employee, enquire if they have any pre-booked holidays and the intended travel dates. If they do, you will be able to successfully manage their onboarding and workload before they go on leave and while they are away.
Some reasons for denying annual leave requests
Operational business needs
If approving leave would create significant staffing shortages or disrupt business operations, not approving leave requests can be considered reasonable. This commonly occurs in industries that experience seasonal peaks, such as retail and e-commerce, hospitality, tourism, farming and agriculture during harvesting and picking season.
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Insufficient notice
Many workplaces have a policy where any request for leave must be submitted by a minimum advanced notice period. Depending on the amount of time off and position within the business this could be a couple of weeks, if the request is only for a few days, to several months, if the leave is extensive. While each situation must be assessed individually, a leave request with short notice may be refused if you’re unable to arrange someone to cover their role while your employee is away.
Critical projects or deadlines
If the employee is in a management or project lead role and their position is vital to the completion and presentation of a major project, meeting agreed customer obligations, or achieving critical deadlines, refusing a request for leave can be considered reasonable.
Too many employees already on leave
Sometimes you may have multiple employees already on leave, or other employees submitted their leave request for the same period earlier and it has already been approved. You can then refuse additional leave applications if approval means your business will be understaffed, unable to operate efficiently, safely, or serve customers effectively.
Annual leave and school holidays
School holidays can be particularly challenging as employees want to take annual leave at the same time to enjoy a family holiday. If too many people are away, the result is often understaffing. This can result in increased stress and workloads for managers and remaining employees.
To prepare for the increase in leave requests around school holidays, it’s helpful to mark your calendar of when they occur.
There are several strategies you can take to ensure you aren’t inundated by a tidal wave of unexpected sick leave if annual leave applications are denied. This includes a clear policy of first in, first approved during popular times throughout the year and requesting a medical certificate when sickness does arise.
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Considering alternatives
If an annual leave request is not viable for the continued operation of your business, rather than refusing it, explore if there is a possible compromise that is mutually suitable for your employee and business such as alternative travel dates. This can prevent potential conflict and promotes a fair decision-making process.
Training team members in other areas of your business and planning workloads around when employees are on leave ensures there’s minimal disruption to operations. Easing the workload of remaining employees while maintaining productivity.
When refusal is unreasonable
All employees have a legal entitlement to annual leave, and you should allow them to take regular breaks wherever reasonably possible.
You cannot deny annual leave requests:
- Without a genuine business reason.
- Because you do not want to arrange replacement staff.
- For discriminatory reasons.
- When you approved some employees’ leave while rejecting others without justification.
Directing employees to take annual leave
Many businesses choose to close over Christmas and New Year. Before directing employees to take leave you must ensure the request complies with the Holidays Act, collective agreement, or employment contract. An employer is permitted only one closedown per annum, where employees are required to take their annual leave.
You must also provide employees with a minimum notice period of the shutdown as outlined in your agreement. This can be as much as three months but must be a minimum of 14 days’ notice as set out in the Holiday’s Act. For many industries, such as manufacturing, a shutdown period provides an opportunity to complete annual maintenance tasks or upgrades.
By communicating early and planning leave effectively, both you and your employees can avoid disputes and maintain a productive workplace.
Excessive amount of annual leave
Excessive amounts of annual leave can be costly for businesses. When an employee has accumulated an excessive amount of annual leave over years of service, you may be able to direct them to take leave. The employer must first consult with the employee about taking annual leave and if no agreement can be reached, the employer can direct an employee to take annual leave upon 14 days written notice.
Annual leave is one of the most valued workplace entitlements. All employees are entitled to annual leave. Encouraging your employees to take time off throughout the year will enable them to relax and recharge. It will also reduce the challenge of juggling multiple leave requests for the same period and disappointing employees if their request is denied.
Call Peninsula 24/7 for expert advice on annual leave entitlements and your employer obligations.
This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.
