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Holiday policy

This holiday policy explains what holiday (also known as annual leave) an employee is entitled to and it also sets out the procedure for requesting holiday. This policy is suitable for a small to medium sized company.

What is a Holiday Policy?

The law on holiday changes frequently and is sometimes complicated, so many employers choose to include procedures relating to holiday in a separate holiday policy, rather than in the employment contract. This means it is easier to change the policy, and avoids the employment contract being too long and unwieldy. This holiday policy explains what holiday an employee is entitled to, the procedure for requesting holiday, the rules on holiday carry over and the interaction of holiday with other forms of paid leave.

It should be drafted (and read in conjunction with) the holiday clauses in the company’s employment contracts, to ensure that there is no inconsistency or conflict between the two.

Why is a Holiday Policy important?

It is important that employees are aware of the procedures and requirements in relation to requesting and taking holiday. 

Without a clear procedure in place there will be uncertainty for employees and potentially inconsistency of treatment, which can lead to disputes.

As explained above, it is important that the employer retains flexibility to change the policy, to reflect changes to the law and practice. Hence it is better for detailed procedures relating to holiday to be included in a separate policy rather than the employment contract.

What are the common pitfalls of a Holiday Policy?

  1. Not having a Holiday Policy
    Without a holiday policy, there may be a lack of clarity over expectations and requirements in relation to holiday, which could lead to disputes.

  2. Having a Holiday Policy that contradicts the employment contract
    It is important to ensure that the holiday policy is consistent with the holiday clauses in the employment contract, to ensure that they do not conflict or contradict each other. This could lead to uncertainty and disputes with employees.

  3. Having a contractual Holiday Policy
    The employment contract contains the terms and conditions that govern an employee’s employment. Generally, changes cannot be made to it without the consent of both parties.

    Normally an employer will want to make changes to its policies and procedures regularly, and in certain situations may not want to be tied to following them to the letter, particularly if the law changes. For these reasons, it is usually advisable for the holiday policy to be non-contractual, so that it does not form part of the employment contract and changes can be made. Otherwise, it will need to obtain staff agreement to any changes, however small.

    The holiday policy should therefore clearly state that it is not contractual i.e. that it does not form part of the employment contract.

  4. Including too much legalese and detail
    The best policies are clear, concise and easy to navigate and understand. Policies that are long, unwieldy and full of jargon are unlikely to be used or understood.

  5. Not keeping the Holiday Policy up to date
    Employment law in the UK changes frequently, and this is particularly true in relation to holiday. Using a PocketLaw template, and regularly reviewing the finished policy, ensures that an employer remains legally compliant when changes to the law happen.

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