Every small business that has employees also needs to have their own holiday policy, also known as an annual leave policy.
We’ve teamed up with Clarkslegal to bring you an annual leave policy template that you can customise to make sure that it works for you.
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Small businesses have their own, specific legal requirements, but they are unlikely to have their own in-house legal counsel. Clarkslegal offer tailored, customisable templates that you can use to build the documentation that you need.
There are important statutory requirements when it comes to annual leave, and these will need to be abided by regardless of the contents of your holiday policy.
The amount of leave to which your employees are entitled will depend on the number of days a week they work. If the employee works five days a week, they will be entitled to at least 28 days’ paid holiday. If they work part time, you need to multiply the number of days they work per week by 5.6 to get their holiday entitlement. For example, if they work two days per week, they will be entitled to 11.2 days’ paid holiday.
Remember that 28 days is the statutory maximum: even if employees work more than five days per week, they are not legally entitled to more than 28 days’ leave – unless, as we’ll see later, you choose to offer more.
Many businesses choose to offer more generous holiday leave entitlement, for example in order to attract and retain the best talent. You are absolutely entitled to do this. However, you should think carefully about staffing levels, and make sure that you are able to keep your business running effectively regardless of holiday time.
You may also think about bank holidays. Legally, you are entitled to include bank holidays in the statutory leave period, but many employers choose to offer these as extra days off.
Our holiday policy template provides a simple framework for employees booking time off. It involves notifying line managers, who can use their discretion when it comes to, for example, more than one employee on the same team asking for time off during the same period. According to the policy, all requests must be signed off by a line manager in advance, and any leave that is taken without that authorisation will be treated as an unauthorised absence.
The annual leave policy also makes provision for the minimum period in which employees must book their time off. In the template, employees are asked to give at least two weeks notice for all annual leave. Legally, they must give at least twice as many days as the leave being requested, however, it’s common to try to set a standard period in your policy for ease and, as a matter of good practice that you would like employees to abide by.
Our annual leave policy example generally requires that all annual leave is taken in the year to which it applies. However, there are certain ‘exceptional circumstances’ under which employees must be allowed to carry leave over, at their discretion.
The most common of these is an extended period of incapacitation. However, you should remember that all employees have the statutory right to accrue holiday entitlement during periods of maternity, paternity, or adoption leave.
If you would like to make changes and don’t have Adobe Acrobat, you can also download our annual leave policy template in Word format.
This document has been produced by Clarkslegal so we can’t take responsibility for its contents. We'd recommend you take professional advice before making any important decisions based on its contents.
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