The situation
A client contacted us for advice. One of their employees was persistently failing to take his holiday.
He was a highly valued: conscientious, committed team member and always willing to go the extra mile. But never took his holiday.
The client had a generous leave policy of 25 days plus bank holidays, and the employee had consistently carried over unused leave year after year. By the time they contacted us, he had accumulated over 30 days of unused holiday, despite regular reminders from his line manager.
The business owner was concerned for both legal and wellbeing reasons:
- Could they force him to take his holiday?
- Were they liable for the backlog?
- Was this creating a bad precedent for other staff?
Our assessment
After reviewing their holiday policy and employment contracts, we identified three key risks:
1. Legal risk: Statutory leave cannot be carried over indefinitely
Under UK law, employees must take at least four weeks of statutory leave (as part of their 5.6-week entitlement) within the relevant leave year, or risk losing it, unless they’ve been unable to take it due to reasons like sickness or maternity leave.
The client didn’t have a robust process for informing him of potential loss, meaning he could argue that he wasn’t properly warned. This meant the business might still be liable to honour the unused leave, potentially even on termination.
2. Wellbeing and performance impact
While the employee saw skipping holidays as dedication, chronic overworking can lead to burnout, reduced productivity, and long-term absence. The business owner had already noticed signs of tiredness and lower morale in his behaviour – he was less collaborative and more reactive than usual.
3. Cultural impact
Other staff had started to mirror his behaviour, with two team members also deferring leave requests during busy periods. The message – unintentionally – was becoming “holidays are optional.”
Our advice
We provided a multi-step strategy to address the issue, balancing legal compliance, employee wellbeing, and positive workplace culture.
Step 1: Formal reminder of entitlement (and risk of loss)
The client issued the employee a written notice clearly stating:
- His remaining statutory holiday entitlement
- That if it was not used before the end of the leave year, it could be lost
- That the company would support him in planning and taking leave
This step is key. Employers must give clear notice to rely on the “use it or lose it” principle.
Step 2: Initiate a wellbeing conversation
The employee’s line manager arranged an informal check-in focused on wellbeing, not discipline. She asked:
- Why he hadn’t been taking holiday
- If workload or expectations were a barrier
- How he was feeling about work/life balance
He admitted he felt guilty leaving during busy periods, feared falling behind, and believed the team would struggle without him.
This opened the door to reassurance and planning support.
Step 3: Mandatory leave planning
We advised the business to introduce a structured leave planning process, requiring staff to:
- Book at least 50% of their annual leave by mid-year
- Use all statutory entitlement within the leave year
- Spread leave evenly (to avoid year-end bottlenecks)
The business owner supported this by setting blackout dates only where necessary and encouraging people to take time off even in short bursts.
Step 4: Culture reset from the top
To shift the culture, the business owner began modelling good behaviour by booking and taking her own leave—and talking positively about it. She encouraged her leadership team to do the same and introduced a simple “Time Off Tracker” shared with the team.
Key takeaways for small business owners
- You can’t force holiday to be taken retrospectively, but you can require staff to take it going forward—with proper notice.
- Unused holiday creates legal risk, especially if staff haven’t been clearly told they might lose it.
- Taking time off is a health and productivity issue, not just a contractual one.
- Lead by example—how you treat your own holiday sets the tone for the team.
If you have employees with years of unused holiday stacking up, now’s the time to address it. A few policy tweaks and a conversation could make all the difference – for them and your business.
If you’d like any further advice on what to do when an employee refuses to take holiday, do get in touch.