Thread: Annual Leave During Probation Period

We are looking to implement a policy that prevents employees on probation taking annual leave during their probationary period, has anyone else done something similar?

I don't see any legal issues with it, unless someone can advise me otherwise?

Dear MadHR

Good question and one that is frequently asked and misunderstood by employers.

Employees have the right to take holidays from Day 1 of their employment without there being any accrual of entitlement. However, as a lot of companies are nervous about dismissing someone during or at the end of their probationary period and having to deduct overtaken holiday entitlement and not having the final pay to cover such deductions, some companies do write into their written statements of terms and conditions of employment and/or holiday policy that holidays during the probationary period are restricted.

You also have to ensure that you write into your written statements and/or policies that you reserve the right to deduct overtaken holiday entitlement that has not accrued from their final pay.

If you wish to restrict holidays then you need to ensure that you run an accrual system of holiday entitlement that is built up over the first year of employment. This means that for every month they work they are entitled to one twelfth of their annual entitlement, or if they have 20 statutory days that it accrues at 1.67 days for each calendar month of service. However, you need to ensure that this is written into the written statement and/or policy.

You can also restrict when holidays are to be taken, but again this must be written into the documents.

If they work full time they are still entitled to any paid public or bank holidays or if they are part time,a pro rata entitlement.

You also have to remember that a probationary period has no meaning in law and employees are permanent from Day 1. This means that any qualification period required for statutory rights in employment starts to run from Day 1 as well, irrespective of whether or not any probationary period is in place. The probationary period is a period where you have the opportunity to review how they fit in. However, most companies insert contractual entitlement that are conditional upon a minimum period of service that restrict benefits during this period, such as pensions.

Whatever you do you must ensure that your written statements and/or policies contain these rights as well as a right to deduct overtaken holiday entitlement.

If the employee leaves during the probationary period they would still be entitled to pay in lieu of untaken and accrued holiday entitlement.

There is a lot that could be enhanced here to your question, but I have kept it short. If you wish to have any further info or advice, please do not hesitate to contact me.

Best wishes

Carol