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Employees not taking annual leave should raise alarm bells for HR

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When it comes to annual leave, there are two types of people: those who plan their time off meticulously and make the most of their paid time off, and those who don’t.

For people in the first camp, it may come as a surprise to hear that over six in 10 UK workers failed to take all of their allocated annual leave in 2022.

This means that, effectively, they lost out on pay by opting to work more hours during the year than their contract actually requires.

But why are people foregoing the annual leave they have rightfully accrued?


Legal-ease: Paid leave entitlement

Ensuring employees take their annual leave

Millions of UK workers miss out on annual leave


According to a recent survey, one in 10 UK workers didn’t take all of their annual leave last year because they felt pressured by management.

This is a really concerning statistic, placing 10% of the workforce at considerable risk of burnout.

Burnout is a serious issue that not only negatively impacts on employees’ physical and mental health, and quality of life, it also affects company productivity and profit.

According to the Health and Safety Executive, nearly 1 million people suffered with work-related stress, depression, or anxiety in 2021/22. And 1.8 million working days were lost as a result.

As we all know, employers have a duty of care to protect the health, safety and wellbeing of their staff under the 1974 Health and Safety at Work Act.

So, effective mental health support is not a nice-to-have, it’s a legal obligation and a necessity.

And perhaps the most important aspect of supporting positive mental health is ensuring adequate rest. That’s why annual leave is fundamental.

Having a sufficient break from work encourages staff to switch off, enjoy their lives outside of work, and return feeling refreshed.

Sometimes workloads can be busy, and there may be times you, as an employer, need all hands on deck. But if this starts to become the status quo then you need to step in and make changes.

Employers can decline annual leave requests if there are genuine, non-discriminatory business reasons, such as to avoid understaffing, or if it’s a particularly busy time of the year. 

But to prevent employees from taking their full statutory leave entitlement presents a real risk of non-compliance when it comes to protecting your staff.

While most employers will likely experience issues in prioritising and approving holiday requests from multiple staff members, particularly during the summer, they must also pay close attention to those employees who have not taken time off in a while.

Consider the reasons behind this. You may want to review their workload or check in with them one-to-one, to understand if there are any issues you should be aware of.

If they feel unable to step away from their role for any amount of time for fear of not getting their work done, then this is where expectations will need to change, and you may need to consider expanding your team.

It is possible to enforce holidays if you are concerned that an employee needs time away from work. But you would need to give the correct notice, which would be double the amount of leave to be taken.

Given the cost of living crisis, some will likely be foregoing expensive holidays this year. But a break from work, whether that means going away or staying home for a week or two, can work wonders.

Having policies that give employees the option to carry over unused annual leave into the next year, or to buy and/or sell annual leave back to the company, can work well by giving more flexibility in terms of when and how they enjoy their time off.

But this should never be used as a substitute for employees taking their full leave entitlement. Rather, look at it as a buffer to ensure staff don’t miss out on valuable time away from work should a situation arise, personal or otherwise, where they are unable to take their full entitlement during the year.

Kate Palmer is HR advice and consultancy director at Peninsula

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