This is a question employers ask frequently, particularly in small teams, during peak periods, or when several employees want leave at the same time. The short answer is yes, an employer can refuse an annual leave request, but only where the refusal is reasonable, lawful, and made in good faith. Understanding when you can say no, and how to do it properly, is important to avoid unnecessary disputes.
Under the Holidays Act, annual leave must be taken at a time agreed between the employer and employee. This means employees do not have an automatic right to take annual leave whenever they choose. Employers are entitled to consider business needs and can decline requests where there is a genuine operational reason.
Common reasons an annual leave request may be reasonably refused include insufficient staffing cover, peak business periods, other approved leave that would leave the business short staffed, or the employee not having sufficient accrued leave.
While employers can refuse annual leave in some circumstances, they cannot refuse it indefinitely or without justification. Blanket rules such as no leave ever, or repeated refusals without engaging in discussion, can breach good faith obligations.
It is also risky to refuse annual leave as a way of managing performance or behaviour issues. Annual leave should not be used as leverage or punishment, even where there are underlying concerns with an employee.
Good faith and reasonableness are critical. Even where there is a legitimate business reason to decline a request, employers are required to communicate openly, explain the reason for the decision, and genuinely consider the employee’s request. Acting in good faith does not mean the employer must always agree, but it does require a fair, transparent, and consistent approach.
Situations where multiple employees request the same time off are common, particularly around holidays. Employers can manage this by applying clear and consistent criteria, such as first come first served, skill coverage requirements, or rotating priority during peak periods. The key is that the approach is applied consistently and not selectively.
Clear expectations around leave planning, especially during busy times, can significantly reduce conflict. Having these expectations documented in a leave policy or employment agreement provides clarity for both employers and employees.
The safest approach is to assess each annual leave request on its merits, document the business reasons if a request is declined, and discuss alternative dates where possible. In many cases, a conversation about different timing or partial leave can resolve the issue without damaging the employment relationship.
Annual leave is intended to support rest and wellbeing. Employers should also ensure that employees are able to take their leave over time, rather than continually deferring it due to business pressures.
If you are unsure whether refusing an annual leave request is appropriate, or you are managing competing requests in a small team, getting advice early can help ensure decisions are fair, lawful, and consistent, and reduce the risk of complaints or personal grievances.
