Working During Annual Leave In The UK: Employer Rules And Risks

When your business is busy, it can be tempting to ask a team member to “just jump on a quick call” or approve a few emails while they’re on holiday.

However, under UK law, annual leave is time off from work. If an employee is working during annual leave (even a little), you risk breaching the Working Time Regulations, opening the door to grievances or unlawful deduction of wages claims, and damaging morale.

In this guide, we’ll walk through what the law expects, when you can contact staff, how to handle side jobs during holidays, and the contracts and policies you should have in place so you’re protected from day one.

What Counts As Annual Leave (And Why “Working” Undermines It)

Annual leave in the UK is primarily governed by the Working Time Regulations 1998 (WTR). Most employees are entitled to 5.6 weeks’ paid holiday per leave year (pro‑rated for part‑time staff). The point of annual leave is to rest and recuperate. If someone performs work during their holiday, that time does not really function as “leave” in the sense the law intends.

Examples of “work” that can undermine leave include:

• Logging into business systems to process tasks or approve payments
• Covering customer queries, sales, or on-call duties
• Attending internal meetings (even briefly)
• Producing deliverables, reports, or content

By contrast, genuinely incidental activity (for instance, a colleague texting to ask where a file is stored) is unlikely to convert the day into “work”. But if the activity is meaningful, productive work, then legally the time should be treated as work and not annual leave.

Remember, paying in lieu of statutory leave is generally prohibited except on termination. If an employee “works” on holiday, the safer approach is usually to treat the day as work and allow them to rebook the leave later.

The Employment Rights Act 1996 also underpins holiday pay and protections against unlawful deductions. This is one reason to keep your leave processes clear and consistent with your statutory duties as an employer.

Can You Require Staff To Work During Annual Leave?

Short answer: no. You can’t compel someone to work during annual leave. The whole point of booked leave is that the employee is not working. If the business genuinely needs coverage, you should rearrange schedules or resourcing rather than asking a team member to interrupt their holiday to perform work.

There are two separate concepts to keep in mind:

• Refusing or restricting when leave can be taken: You can require staff to take leave at certain times or refuse requests where there’s a valid business reason, provided you follow the notice rules and any contractual procedures. For general principles, see our Q&A on whether an employer can refuse annual leave.
• Recalling staff from leave: In very limited cases, some contracts permit recall. Even then, you must give reasonable notice, reimburse losses (e.g., non-refundable travel costs), and allow replacement leave. We cover recall further below.

Even if an employee informally offers to help while away, it’s better practice to decline. If you accept their work, you may be obliged to treat the time as working time, with implications for holiday pay, working time limits, and rest breaks.

Where roles involve critical business continuity (for example, IT security or regulated operations), plan ahead. Build a rota, implement cross-training, and document handovers so you’re not tempted to erode someone’s holiday by asking them to step in.

Employees Working Elsewhere During Annual Leave: What’s Allowed?

Another common scenario is employees using annual leave to do a second job or freelance work. This raises several legal and practical issues for employers.

Check Your Contracts And Policies

Start with the employment contract. Many contracts include clauses requiring employees to seek written consent before taking on secondary employment, and to avoid conflicts of interest. Well-drafted Employment Contracts can also include confidentiality and IP provisions that continue to apply when staff are off duty, plus clear rules around outside work.

You might also use your Staff Handbook to set expectations on second jobs, conflicts, and reporting obligations. A short, accessible policy often prevents misunderstandings.

Working Time And Health And Safety

The Working Time Regulations cap average weekly working hours at 48 (unless the worker has signed an opt-out) and set minimum daily/weekly rest. If an employee works elsewhere during annual leave, those hours still count towards the totals. You must take reasonable steps to protect workers from excessive hours, fatigue, and associated health and safety risks.

So, if someone wants to undertake a second job, consider asking for information about hours to assess risks. You’re entitled to refuse permission where the arrangement could breach legal working time limits or present genuine health and safety concerns.

For day‑to‑day compliance, it helps to ensure managers understand the basics of Working Time rules and breaks.

Restrictive Covenants And Competition

If the side work competes with your business, involves soliciting your clients, or risks misuse of confidential information, you may rely on contractual restrictions. Sensible, tailored non‑compete clauses and non‑solicitation provisions can help protect your legitimate business interests. Make sure restrictions are no wider than necessary in scope, geography and duration so they remain enforceable.

Contact, Emails And “Light Touch” Work While On Leave

What about quick checks - for example, scanning emails to keep the inbox manageable, or taking a five‑minute call? In practice, many businesses fall into informal patterns here. The legal risk is that repeated or substantive tasks during leave convert it into working time.

Best practice is to set clear boundaries:

• Handover before leave so someone else is responsible for approvals and urgent matters
• Use out‑of‑office messages directing senders to a colleague
• Disable notifications on work apps or devices during leave
• Make it explicit that employees are not expected (or permitted) to work while on holiday

If you provide work phones or allow BYOD, remember there are GDPR and privacy considerations if you monitor usage. Be transparent in your policies and ensure any monitoring is lawful, necessary and proportionate - our guide to work phones vs BYOD walks through the common pitfalls for employers.

Also keep an eye on knock‑on compliance: if someone does work while on leave, they still need the minimum rest breaks and daily/weekly rest outlined in the WTR, as well as appropriate pay and record‑keeping. For a refresher on break entitlements, see our overview of rest and lunch break rules.

Cancelling Or Recalling Annual Leave: When Is It Lawful?

Cancelling or recalling booked annual leave is disruptive and should only be used as a last resort. If you think you might need this flexibility for critical roles, address it expressly in your contracts and policies - and use it reasonably.

Contractual Right And Reasonable Notice

There’s no general statutory right to recall employees from annual leave. If you want the option, build a contractual term that allows recall with reasonable notice and sets out what costs you’ll cover. Without such a clause, you’re relying on employee consent.

In any event, it’s good practice to:

• Explain the genuine business necessity (e.g., emergency shutdown, regulatory incident)
• Give as much notice as possible
• Reimburse out‑of‑pocket losses (non‑refundable flights, accommodation)
• Allow replacement leave to be booked promptly

Bank Holidays And Inclusive Leave

Disputes also pop up where contracts are unclear about bank holidays. If your contract says annual leave is “inclusive of bank holidays,” that affects how much leave remains to be booked - and whether the business can require attendance on a bank holiday. If this is relevant to your operations, ensure your wording is clear; our explainer on “inclusive of bank holidays” covers the typical issues.

Refusing Leave Requests Upfront

In some cases, the better route is to manage peak‑period availability before leave is approved. You can refuse leave for legitimate business reasons if you follow proper notice and any internal procedure. Aligning team leave windows in advance reduces the chance you’ll need to recall anyone later.

Pay, Record‑Keeping And Risk Management

Getting the admin right will save you headaches later, especially if holiday pay or working time is ever challenged.

Holiday Pay And Working During Leave

If an employee works on a day that was supposed to be annual leave, the safest approach is to:

• Pay them correctly for the hours worked, and
• Recredit the lost leave so they can take the time off properly later.

Avoid “offsetting” arrangements that undermine statutory leave. Paying in lieu of statutory holiday is generally not permitted during employment.

Accurate Records

Maintain accurate records of:

• Leave requests, approvals, and any cancellations
• Hours worked (including any work undertaken during leave)
• Any reimbursements for recalled leave

Clear records help you demonstrate compliance with the WTR and protect against disputes.

Wage Deductions And Overpayments

Occasionally, errors happen - for example, paying holiday pay for a day later treated as work, or discovering leave was taken in excess of entitlement. If you need to correct pay, make sure any deduction from wages is lawful. Only make deductions where there’s a clear contractual right or prior written consent, and give the employee fair notice. Our guide to wage deductions sets out the compliance basics.

What To Put In Your Contracts And Policies

Most risks linked to working during annual leave can be reduced with clear, fair documentation. Here’s what to include.

Employment Contracts

Your Employment Contract is the right place to set the rules on:

• Annual leave accrual, approval processes and notice requirements
• Whether leave is inclusive/exclusive of bank holidays (and how bank holidays are handled)
• Any limited right to cancel/recall leave (with reimbursement and reasonable notice)
• Secondary employment, conflicts of interest, and confidentiality
• Flexibility to require overtime or weekend work outside of leave periods (with appropriate pay or time off in lieu)

For roles where competition risks are real, consider reasonable restraints, such as tailored non‑solicitation and non‑compete clauses, drafted to be no wider than necessary.

Staff Handbook And Policies

A practical Staff Handbook (or a separate Workplace Policy) can reinforce how annual leave works in your business. Useful inclusions are:

• Clear “no work while on leave” principle and boundaries on contacting staff on holiday
• Handover expectations and cover arrangements before leave starts
• Process for urgent issues and who holds delegated authority during absences
• Rules for work devices and notifications during leave (with privacy/monitoring transparency)
• Procedure and criteria for approving secondary employment (including working time assessments)

It also helps to train managers to stick to the rules. A well‑meaning “quick favour” message during someone’s holiday can create legal and employee relations issues you’d rather avoid.

Operational Tips To Keep Leave As Leave

• Schedule a formal handover meeting before each holiday period and confirm who is covering what
• Use shared inboxes or approval workflows so tasks don’t bottleneck with the person on leave
• Implement out‑of‑office templates that route contacts effectively, reducing the urge to message the person on holiday
• Consider whether your leave year or busy‑period rules need adjusting to prevent crunch points

Key Takeaways

• Annual leave is time off work under the Working Time Regulations - if staff perform substantive tasks, that time should be treated as work, not holiday.
• Don’t require employees to work during annual leave. If urgent business needs arise, consider resourcing or, if expressly allowed in contracts, recall on reasonable terms with reimbursement and replacement leave.
• If employees want to do secondary work while on leave, check your contracts and policies. Assess working time limits, health and safety, and any conflicts or competition risks. Use sensible restraints like non‑solicitation and proportionate non‑competes where justified.
• Set firm boundaries on emails, calls and “light” work during holidays. Build handovers and delegated authority so the business keeps moving without disturbing leave. Be transparent about any device monitoring and respect GDPR obligations.
• Get the admin right: recredit leave if someone works, pay correctly, keep accurate records, and only make wage deductions where lawful and documented.
• Lock in your rules through well‑drafted documents: Employment Contracts, a Staff Handbook, and clear policies on leave, bank holidays, outside work, and device use.

If you’d like help tailoring your Employment Contracts, leave and secondary employment policies, or putting practical rules in place that work for your business, you can reach us on 08081347754 or team@sprintlaw.co.uk for a free, no‑obligations chat.