Is this lawful?

Hi All

Just want to run something by you and check if its right or not - we have recently terminated someone's contract (due to poor performance) and put them on garden leave for their 1 month notice. During this time they had some holiday booked and I informed them that by their leaving date, their taken holiday would be 2.5 days over what they accrued, so would be deducted from their final pay.

The employee then asked to cancel 2.5 days of their holiday. I responded a few days later to say no, this wasn't possible due to planned workloads. They said 1 of the days was from last week and they actually did some work as part of their handover on this day. They said had I responded quicker they could have explained that this was one of the dates they wanted to cancel.

My question is can we maintain them taking the level of holiday booked and refusing the request, in light of the fact it will lead to a deduction from their final pay? Could they bring a claim over this in view of the fact they requested to cancel the 2.5 days (given they are on garden leave anyway I could see why they would do that!)

Many thanks!

  • Maybe...

    But I am not sure its reasonable and that's an important test.

    Generally holiday can only be cancelled by mutual agreement or by employer giving certain notice

    However the employer also needs to act reasonably and making someone take AL during their notice which takes them over their accrued AL isn't that reasonable
  • Hi William

    If you've put them on gardening leave doesn't the issue of annual leave fall away completely? You've instructed them not to attend the workplace, so surely they don't need to take annual leave as there's no work to do. (this would change if you wanted to bring them back in to the workplace to work their notice but they were then not available).
  • In reply to Alex Hooper:

    Hi Alex
    But see

    There should be an express contractual right to deduct from final pay excess holidays taken like this.

    Even if one exists, I think in the circumstances many employers wouldn't be intent on trying to get absolutely last pound of flesh by insisting on the deduction and just call it square.
  • In reply to David:

    Hi David

    My understanding was the same as the article - but I though that was about using up outstanding accrued holiday during gardening leave (we have have an explicit contractual clause to this effect and use it regularly).

    What I didn't understand is how you could force them to take more holiday than they've accrued while on gardening leave , therefore putting them into a deficit that you then make a deduction for. 

    I read it as:

    Employee has booked 2.5 days holiday. If  they had remained employed  until holiday year end  they would have had the allowance to cover this.

    Employee dismissed and put on gardening leave.

    New termination date means there is not enough holiday allowance accrued to cover the 2.5 days

    Despite being on gardening leave, employer is forcing the employee to take the previously booked 2.5 days on top of gardening leave (ie simultaneously) , causing an annual leave deficit that they will make a deduction for in final payroll. That felt like effectively reducing their notice period by 2.5 days.


    (If you were asking them to work their notice AND insisting they took the previously booked holiday then I understanding making the deduction as they were unavailable to work - although it seems a bit tough to dismiss someone and force them to take a previously booked holiday that then incurs a deduction when they no longer want to take it)

    Sorry if I'm missing something, it's been a tough old day.

  • In reply to Alex Hooper:

    Agree entirely with your analysis and accept that the circumstances differ rather, Alex. However,  arguably the 2.5 days booking was made in full compliance with the WTR and so the employer (still arguably) might be able to insist on it going ahead as prebooked holiday, irrespective of this resulting in an entitlement shortfall as a result of the enforced termination of employment before the end of the holiday year and on deducting the shortfall as per contract.

    But agree this is at a minimum borderline unreasonable in a legal sense and in a pragmatic sense not at all reasonable.

  • In reply to David:

    Ah comprehension dawns, thank you!
  • In reply to Alex Hooper:

    Thanks all. It sounds like we could be accused of being unreasonable but could that lead to a claim? For what, unlawful deduction of pay?

    I know for a fact the employee is away next week on holiday, but he could say he is still available for work (remotely) if it was necessary. He has been sent a couple of pieces of work to finish during the garden leave and has completed these. Does the fact he's away next week make any difference?

  • In reply to William:

    Just to add, it's the excess holiday at question here. We have the clause for using up untaken AL while on garden leave, so he's asking to remove the difference of what he previously booked, so he doesn't have a pay deduction made. My boss is not keen to adhere to this though!

  • In reply to William:

    Your boss sounds like one of those kind and generous souls who'd always ensure that if they came across someone drowning they'd be at pains to throw them both ends of the rescue rope instead of just the one.......
  • In reply to David:

    Haha yes, you might be right David! But to convince the boss to let it go, is there actually a claim the employee can make at ET over this? I could do with explaining that and how likely he would be to win...
  • In reply to William:

    Hi William
    It would probably be unlawful deductions possibly with breach of contract as a backstop. But (a) it would cost the employee nothing to register it and kick it off (b) it would involve coming up with some complicated legal arguments etc to defend and (c) even if he didn't 'win' it would still have cost your employers £££££ in legal fees to defend
  • In reply to David:

    Hi David, or anyone else who could help.

    This issue has moved on a bit - the employee raised a grievance about a number of things on his last day of employment. His manager then raised a grievance against him and the MD emailed it to him and said both will be dealt with in due course.
    However the MD then realised she sent it to him 20 minutes past his finish time, therefore he has received it when no longer employed by us. The MD asked me if that means he can simply disregard it and say it's not valid, much as an employer can do that if an ex employee raised a grievance after leaving.
    And I genuinely am not sure about that! It's such an unusual situation, I can't find anything online about it.

    Would welcome some thoughts please!
  • In reply to William:

    Hi William, why would your MD send the grievance straight to the (now ex-) employee? It is your responsibility as employer to look into and resolve a grievance, and sending it straight off to the subject of the grievance is not a particularly sensitive way of dealing with it. What is the expected response from him, even if he does read it?
  • In reply to Katie:

    Hi Katie

    I agree, but as you can see, the MD isn't exactly sensitive and it seems there has been a real falling out here. I suppose arguably as he was on garden leave and due to leave, it was sent to inform him it had been raised but then I agree, the MD wouldn't have had to send the actual grievance warts and all! I don't know what the now ex employee is supposed to do with it, but it relates to part of his grievance so I would assume that it will all be investigated at the same time. But there's not much that can be done now hes left, other than possibly using the outcome to undermine him in the event of a claim...
  • In reply to William:

    He was sent work to do while he was on garden leave. So he wasn’t on garden leave, he was working from home, at least while he did any of the work.

    This is a real muddle and If the employee decides to claim illegal stoppage of wages, the employer is going to look worse than Scrooge.