Can an employer cancel an employee's booked period of annual leave?
Yes, an employer can cancel an employee's period of annual leave if it gives the required notice. Under reg.15 of the Working Time Regulations 1998 (SI 1998/1833), an employer can require an employee not to take annual leave on particular days by giving the employee notice of at least the same length as the period of leave to be cancelled. For example, if the employee has booked a period of four days' annual leave, the employer must give at least four days' notice of cancellation.
Employers can agree with their workforce alternative rules about the notice required to book and cancel leave. An employer should ensure that it complies with any such workforce agreement or contractual arrangement.
An employer must not cancel a period of annual leave if it means that the employee is not able to take their full statutory annual leave entitlement in that leave year.
If an employer cancels a period of leave without a clear business reason and, for example, this results in the employee not being able to go on a booked holiday and suffering financial loss, the employer could face a claim for constructive dismissal. The employee may be able to argue that the cancellation is a breach of the implied duty of mutual trust and confidence, entitling them to resign.
Employers should therefore cancel an employee's booked period of annual leave only after considering all alternative options to ensure that the needs of the business are met. The employer could consider whether or not it would be appropriate to compensate the employee for any inconvenience.