Can annual leave be cashed out if I do not want to take 4 weeks holiday during Christmas and New Year?
It depends!
If an employer does not regularly close down during Christmas and New Year then an employee can continue to work and can ask their employer to pay out up to one week of their four weeks minimum entitlement to annual holidays per year for each entitlement year.
The employee must ask their employer to cash out 1 week of their annual holiday entitlement in writing and must have completed 12 months of employment. If an employer agrees to pay out some of the employee’s annual holidays, the employer needs to pay as soon as they can, usually in the next payroll cycle. An employer is not obliged to agree but is obliged to reply within a reasonable time to the cash out request.
If an employment agreement provides for annual holidays in addition to the minimum of four weeks, it may also provide for the additional holidays to be cashed up. If the employment agreement provides for five weeks of annual holidays per year, then two weeks could be cashed up.
If an employer regularly closes down for a holiday period or seasonal break and requires its employees to take annual leave, this is referred to as a “closedown period”. The employees must use the annual leave that they have available. If an employee is entitled to annual holidays, they must stop work (as long as they have been given 14 days’ notice) and take as much of their annual holidays balance as needed to cover the closedown period. Payment for these annual holidays is calculated in the usual way that payment for annual holidays is calculated.
If an employee does not have enough annual holiday entitlement balance to cover the whole closedown period, then they will be required to take all their annual holiday entitlement they currently do have and can take an annual holiday in advance (if the employer agrees) or they would need to take unpaid leave during the closedown period depending on what the employer and employee agree to.
If in doubt as to whether holidays can be cashed out or how to do it, come talk to us
