Annual Leave Policy

Annual Leave Policy

Last Reviewed: 29/05/2026

Next Review Date: 29/05/2027

Introduction

Highway Data Systems Limited recognises the importance of employees taking regular annual leave to support their health, wellbeing and work-life balance.

This policy sets out the rules and procedures relating to annual leave, including holiday entitlement, requesting and approving leave, holiday pay, carry-over and record keeping.

This policy applies to all employees of HDS, including full-time, part-time, permanent and fixed-term employees.

Where different statutory rules apply to irregular-hours or part-year workers, HDS will apply the statutory provisions relevant to their circumstances.

Status of this Policy

This policy does not form part of the contract of employment and may be amended by the Company from time to time.

Nothing in this policy will reduce any statutory or contractual annual leave entitlement.

Holiday Year and Entitlement

The Company’s holiday year runs from 1 January to 31 December.

Unless the employee’s Contract of Employment states otherwise, a full-time employee is entitled to 25 working days’ paid annual leave in each complete holiday year, plus eight Company-recognised public/bank holidays as specified in their Contract of Employment.

Part-time employees will receive the appropriate pro-rata equivalent of the full-time entitlement. Their actual entitlement will be confirmed in their Contract of Employment.

Where a Company-recognised public/bank holiday falls on a day that a part-time employee would normally work, the relevant amount of leave will be deducted from their overall pro-rata entitlement.

Fixed-term employees will receive an appropriate pro-rata entitlement according to the duration of their employment.

Employees joining or leaving HDS part-way through a holiday year will receive a pro-rata entitlement for that holiday year.

During the first year of employment, annual leave will accrue in accordance with the employee’s Contract of Employment and applicable statutory requirements.

Requesting Annual Leave

All annual leave must be approved and authorised in advance through the applicable process below.

Employees should initially discuss proposed annual leave with their Line Manager and, once agreed in principle, submit a request for formal approval using one of the following routes:

HR08 Annual Leave Request Form: Requests are submitted via Jotform to the Office Manager, who will check them with the employee’s Line Manager before approving or declining the request. The employee will receive the decision by email, including the reason if the request is declined.

HDS portal: Requests are submitted through the portal directly to the employee’s Line Manager for approval.

Submitting a request does not mean it has been approved. Employees must receive confirmation of approval before making non-refundable travel, accommodation or other arrangements.

Approved leave will be recorded in the HR Staff Holidays Board in monday.com.

For planned periods of annual leave, employees should normally provide at least four weeks’ notice.

For individual or ad hoc annual leave days, employees should provide as much notice as reasonably practicable. Requests made with less notice will be considered taking account of the circumstances and operational requirements.

Annual leave taken without prior authorisation may be treated as unauthorised absence and may be dealt with under the appropriate Company procedure.

Approval of Annual Leave

HDS will endeavour to accommodate annual leave requests wherever reasonably possible.

Annual leave may be refused on particular dates where there is a genuine operational reason, including:

• staffing requirements;

• competing leave requests;

• workload;

• customer requirements;

• business-critical activities; or

• the need to maintain appropriate operational or management cover.

Requests will be considered fairly and consistently.

HDS will provide employees with a reasonable opportunity to take their statutory annual leave during the relevant holiday year and will encourage employees to use their entitlement.

Review of an Annual Leave Decision

Where an employee believes an annual leave decision has been made unfairly or inconsistently, they may request a review.

The employee should normally submit their request in writing within five working days, explaining the reasons for the review. HDS will consider reasonable requests for an extension.

Where reasonably practicable, the review will be carried out by a Director or another appropriate manager who was not responsible for the original decision.

The outcome and reasons will be confirmed to the employee in writing.

Company-Required Annual Leave

HDS may require employees to take annual leave on particular dates, including during:

• a Company shutdown;

• Christmas or extended public/bank holiday periods;

• periods of reduced business activity; or

• an employee’s notice period.

Where HDS requires an employee to take annual leave, the Company will give at least twice as many calendar days’ notice as the number of days’ leave required, plus one day, unless a different lawful notice period applies under a relevant agreement. 

Employees may therefore be required to retain sufficient annual leave to cover any Company shutdown or other period notified in advance.

Cancellation or Refusal of Annual Leave

HDS will only cancel previously approved annual leave where there is a genuine business need.

Where HDS cancels approved annual leave or refuses a requested period of leave, the Company will provide the notice required by applicable legislation or any relevant contractual provision.

Under the statutory default rules, this will normally be notice equal to the length of the affected period of leave plus one day.

HDS will take reasonable account of the employee’s individual circumstances before cancelling previously approved annual leave.

Carry-Over of Annual Leave

Employees are expected to manage their annual leave and take their entitlement within the Company’s holiday year wherever reasonably possible.

HDS will encourage employees to take their statutory annual leave and will provide employees with a reasonable opportunity to do so.

The Company will remind employees, where appropriate, that statutory annual leave may be lost if it is not taken before the end of the holiday year and there is no statutory or authorised right to carry it forward.

In exceptional circumstances, HDS may authorise up to five days of contractual annual leave to be carried into the following holiday year.

Requests for discretionary carry-over must be made in writing to the employee’s Line Manager and approved in advance.

Any discretionary carried-over leave must be taken within the period specified by HDS.

The five-day discretionary limit does not restrict any statutory right to carry annual leave forward.

HDS will permit statutory annual leave to be carried forward where required by law, including where an employee has been unable to take the relevant leave because of:

• long-term sickness absence;

• maternity leave;

• paternity leave;

• adoption leave;

• shared parental leave;

• ordinary parental leave;

• neonatal care leave;

• parental bereavement leave;

• carer’s leave;

• bereaved partner’s paternity leave; or

• another circumstance giving rise to a statutory carry-over entitlement.

Where sickness prevents a regular-hours employee from taking statutory annual leave, up to four weeks of statutory entitlement may normally be carried forward and must generally be used within 18 months from the end of the holiday year in which it accrued.

Where an employee has been unable to take statutory annual leave because HDS did not provide a reasonable opportunity to take it, did not encourage the employee to take it, statutory leave will be carried forward to the extent required by law.

Different statutory carry-over rules may apply to irregular-hours and part-year workers and HDS will apply the rules relevant to the worker concerned.

Sickness During Annual Leave

Where an employee becomes genuinely unfit for work immediately before or during approved annual leave and wishes the affected period to be treated as sickness absence rather than annual leave, they must notify HDS in accordance with the Company’s Sickness Absence and Attendance Policy.

The employee must provide any self-certification or medical evidence required under that policy and applicable law.

Where the applicable requirements are satisfied, statutory annual leave affected by the sickness absence will be reinstated.

Dishonest claims or abuse of this provision may be dealt with under the Company’s Disciplinary Procedure.

Annual Leave During Sickness Absence

Statutory annual leave will continue to accrue during sickness absence.

An employee who is absent because of sickness may request to take annual leave during their sickness absence.

Any such request should be made using the normal annual leave procedure.

HDS will not require an employee to take annual leave while they are absent on sick leave.

Any contractual annual leave above the statutory minimum will be dealt with in accordance with the employee’s Contract of Employment.

Statutory Family and Other Leave

Annual leave continues to accrue during applicable statutory leave, including maternity, paternity, adoption, shared parental, ordinary parental, neonatal care, parental bereavement, carer’s and bereaved partner’s paternity leave.

Annual leave cannot normally be taken at the same time as an incompatible period of statutory leave.

Employees should discuss with their Line Manager how accrued annual leave will be taken before or after a period of statutory leave.

Where statutory leave prevents an employee from taking annual leave within the relevant holiday year, HDS will allow the leave to be carried forward to the extent required by law.

Holiday Pay

Employees who work regular hours and receive a fixed salary will continue to receive their normal salary in the usual way during all annual leave, including Company-recognised public/bank holidays forming part of their entitlement.

For any employee who qualifies as an irregular-hours or part-year worker, including an applicable zero-hours worker, holiday entitlement and holiday pay will be calculated in accordance with the statutory rules applicable to such workers. HDS may either pay holiday pay when the employee takes annual leave using the applicable statutory reference-period calculation, or, where permitted by law, operate rolled-up holiday pay. Where rolled-up holiday pay is used, it will be calculated at no less than the statutory rate applicable at the time, currently 12.07% of total pay for the relevant pay period where the statutory minimum holiday entitlement applies, and will be shown separately on the employee’s payslip.

HDS will ensure that all employees are able and encouraged to take their statutory annual leave.

Payment in Lieu of Annual Leave

Employees are expected to take their statutory annual leave and will not normally receive payment instead of taking it.

Payment in lieu of statutory annual leave will only be made where permitted by law, including when employment terminates.

Termination of Employment

When employment terminates, the employee’s annual leave entitlement for the current holiday year will be calculated up to their termination date.

The employee will be paid for accrued but untaken statutory annual leave and any contractual annual leave payable under their Contract of Employment.

Where an employee has taken more annual leave than they have accrued at the date their employment ends, HDS may deduct the equivalent overpayment from sums due to the employee where the Company has the necessary contractual or written authority to make the deduction.

HDS may require an employee to take accrued annual leave during their notice period, subject to the applicable notice requirements.

Record Keeping

HDS will maintain records sufficient to demonstrate compliance with statutory annual leave and holiday-pay requirements.

Records will include, where applicable:

• annual leave entitlement;

• annual leave taken;

• annual leave carried forward from previous holiday years;

• holiday pay paid;

• details of relevant elements included in holiday pay calculations; and

• payments made in lieu of annual leave.

Relevant annual leave and holiday-pay records will be retained for a minimum of six years from the date on which the record is made.

Records will be processed and retained in accordance with HDS’s data-protection obligations.

Review

This policy will be reviewed at least annually and sooner where required by changes in legislation, statutory guidance, contractual arrangements or Company requirements.