This factsheet will help you to:

Agree with your employee when to take their annual leave

Decide when it’s appropriate to direct your employee to take annual leave

Manage high annual leave balances
Deciding when annual leave should be taken
Annual leave is essential for keeping employees happy and productive - it’s a time to rest, recharge
batteries and spend time with friends and family.
Annual holidays can be taken at any time by mutual agreement between the employer and employee.
An employee must be allowed to take at least two of the four weeks’ holiday continuously if they so
wish.
Sometimes the timing of annual leave can be a point of contention, for example, if an employee wants
to take annual leave during a busy period. It’s best to sit down and try to find a solution in good faith.
As an employer, you cannot unreasonably withhold consent to an employee's request to take annual
holidays. That being said, the operational requirements of the business would generally be
considered reasonable grounds to withhold consent.
The other issue that may surface is employees refusing to take annual leave. It’s a good idea to keep
an eye on employees’ annual leave balances. Employees who have been with the business a long
time can accrue high levels of annual leave. This can present real cash-flow problems for many
businesses when the employee leaves. It’s therefore advisable to 1) set aside money for annual leave
as you go and 2) encourage employees to take annual holidays regularly.
If an employee does have a high leave balance, discuss the situation with them, including the
outcome you’d like to see. It’s often helpful to put together a leave plan, where the employee
schedules annual holidays at a time that suits them. If you still cannot agree, you can direct the
employee to take their annual holidays with 14 days notice. A longer notice period is highly
recommended.
An employer cannot direct an employee to take their accrued annual leave, only their annual leave
entitlement, i.e. leave that they are entitled to because the anniversary date has been passed.
The rules are different during a closedown period. An employer can direct an employee to take annual
leave during a closedown period, even if they are not entitled to annual holidays yet and/or they do
not have sufficient leave to cover this time off. The employer must given a minimum of 14 days notice,
however a longer notice period is strongly recommended.
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