In what circumstances can an employer refuse an employee’s request to cancel a period of annual leave which was previously agreed by the employer, for example in respect of (COVID-19) where the employee has had to cancel or rearrange their travel plans?

Where an employee wants to cancel a pre-arranged period of holiday, in the absence of a contractual right to do so, they will need their employer’s agreement.

The Working Time Regulations 1998, SI 1998/1833 do not give employees a statutory right to cancel a pre-arranged period of holiday, and it is unusual for holiday provisions in an employment contract, or a holiday policy, to allow for this.

In most cases, therefore, it is likely to be down to the employer to decide whether or not to agree to the request.

There are competing interests to consider, particularly in the context of coronavirus (COVID-19): on the one hand, an employee who has had a holiday cancelled because of coronavirus will want to save their holiday entitlement until such time as they are able to re-schedule their holiday. They may prefer not to use precious holiday entitlement confined to their home under lockdown.

On the other hand, an employer may prefer employees to continue to take holidays during the lockdown period—not least to minimize the extent to which employees build up sizable chunks of holiday entitlement which they then want to take when the lockdown ends and business go back to normal. There are likely to be economic and operational reasons underlying this concern.

The health and wellbeing of the employee is also a relevant consideration in favour of the employee taking pre-arranged time off work.

Employers, employees and workers are encouraged in the Advisory, Conciliation and Arbitration Service (Acas) guidance to be as flexible as they can about holiday during the coronavirus pandemic.

The guidance suggests that it is a good idea for the parties to:

• talk about any plans to use or cancel holiday during coronavirus as soon as possible
• discuss why holiday might need to be taken or cancelled
• listen to any concerns, either from staff or the employer
• welcome and suggest ideas for other options
• consider everyone’s physical and mental wellbeing
• be aware that it’s a difficult time for both employers and staff

(See: Acas guidance on using holiday in the context of coronavirus).

When it comes to dealing with a request to cancel holiday in this context, relevant practical considerations for the employer are likely to include:

• whether there are any applicable contractual provisions permitting the employee to cancel their holiday/the employer to enforce holiday
• the specific circumstances of the employee’s holiday plans. For example, an employer may be inclined to be flexible and allow an employee to rearrange their planned holiday where there is a special trip abroad involved over a more substantial period of time, such as a week or two
• the relevant economic or operational reasons for the employer wanting to enforce holiday, and whether the concerns in this regard could be addressed by agreeing with the employee that proportionate holiday accrued over the lockdown period is taken to avoid a build up
  
• any relevant factors relating to the health and wellbeing of the employee
  
• how the employer has treated similar requests from others
  
• the employee relations impact of refusing a request to cancel holiday (effectively forcing the employee to take the time as holiday in these circumstances)

An employer is under an implied contractual duty not to treat the employee in a wholly unreasonable manner under the imposed term of trust and confidence (see Practice Note: The term of trust and confidence). This could, depending on the circumstances, be relevant in the context of dealing with an employee’s request to cancel or re-arrange a period of holiday where the holiday has been cancelled because of the coronavirus pandemic. The employer’s decision-making should be rational and consistent.

How an employer has treated other similar requests in the past will also be relevant if the decision is to refuse the employee’s request; there is a discrepancy between how it has treated this employee relative to others; there is no reasonable, objective explanation for the discrepancy; and the employee has a protected characteristic (see: Prohibited conduct—overview).

For further information about holiday, generally, see Practice Note: Holiday.