T’is nearly the season for all the annual leave forms to come flooding in, tra la la la la la la la la.  OK, not everyone wants to take time off at Christmas time but now is a good time as any to have a serious chat about annual leave and what sorts of considerations leaders should be giving to requests.

Deck the halls with leave policies

Managing annual leave requests can be a challenging aspect of business operations. Employees have the right to take time off to recharge, while employers need to ensure that the business can still run smoothly. Without doubt, the HR Staff n’ Stuff team will always recommend that the best way to avoid misunderstandings and disruptions in the first instance is to have a well written annual leave policy in place.

But of course we would we say that, we’re HR consultants and we love a good policy and with good reason!

An annual leave policy is not just a nice-to-have; it’s a business necessity.  Without a clear framework in place, confusion, frustration, and tension between management and employees can arise. Key reasons as to how a policy reduces issues in the workplace are

• Consistency and fairness: A policy ensures that everyone is treated equally, regardless of their position or department. It eliminates perceptions of favouritism or inconsistency when it comes to approving or denying leave requests.
  
  
• Operational planning: Businesses need to plan resources and capacity carefully, especially during peak periods like holidays or other industry specific peaks such the end of the financial year. An annual leave policy helps ensure there are enough staff members to keep things running.
  
  
• Employee satisfaction: A transparent and clear policy allows employees to understand their rights and how leave requests are handled, which helps reduce anxiety and confusion.
  

Key considerations when approving annual leave requests

When it comes to approving or rejecting leave requests, leaders must weigh several factors. Balancing the needs of the business with employees’ desires for time off can be tricky, especially when multiple requests come in for the same period. There  are different approaches you could utilise:

1. First-in, best-dressed

The “first-in, best-dressed” principle which simply put means that whoever submits their leave request first gets priority. It’s straightforward and transparent, but it does come with drawbacks:

• Employees who may be slower to submit leave requests, perhaps due to personal circumstances or uncertainty about their own plans, may feel disadvantaged.
  
• If all your key staff submit leave requests at the same time and are approved based on this approach, it may leave the business exposed with inadequate staffing levels.
  
• No consideration is given to priority needs.  For example, one employee may have a family wedding overseas and has no control over the dates but the employee who jumped in first was simply booking a beach holiday that may be easily adjusted as flights aren’t yet booked and the timing isn’t dictated by external forces such as school holidays and weather conditions. 
  

A middle-ground approach is to use “first-in, best-dressed” as a guideline but apply flexibility to account for operational needs and special circumstances.

2. Fairness and equality

It’s important that managers consider fairness when approving leave. For instance, if one employee always takes leave during the Christmas period, while others miss out year after year, resentment and frustration can build. Implementing a rotating system for high-demand periods, such as public holidays, can help balance this.

3. Business needs come first

As much as employees deserve time off, the business must continue to operate. A manager’s primary obligation is to ensure the company can still meet the needs of its clients and continue operations. Before approving a leave request, it’s crucial to assess:

• Staffing levels: Can the business function effectively without the employee? If multiple people from the same team are on leave simultaneously, will that impact the quality of service or delay important projects? Does your policy dictate the number of people from the same team that can be on leave at the same time? Can you maintain productivity or will this place too much pressure on the remaining team members which will in turn take a toll on morale?
• Peak periods: During busy seasons, like tax time for accounting firms or the holiday rush for retailers, approving leave can be risky. Having a clause in your leave policy stating that leave may not be granted during high-demand periods can help set expectations early. Infact, you are able to nominate black out periods in which no leave will be approved for those times when you know it is crucial to have your team at full capacity.

4. Communicating With Employees

When denying leave requests, clear communication is essential. Employees will be more understanding if you explain the business reasons behind the decision rather than leaving them in the dark.  Clarity up front in the form of an annual leave policy will assist as the groundwork is already in place and some expectations are already managed. 

Handling Sick Leave After a Rejected Leave Request

A trickier situation occurs when an employee who has had a leave request rejected suddenly calls in sick for the same period. While it’s important to maintain trust, it's also necessary to address potential misconduct that is essentially fraudulent use of leave.

Employees are entitled to leave when genuinely ill, and employers must respect that right. Before jumping to conclusions, it’s essential to follow due process. Again, a well constructed policy will support you in this situation especially when you outline requirements around your right to request a medical certificate if an employee takes personal leave due to illness or as a carer for a family member who is ill.

If an employee has a history of conveniently calling in sick after leave rejections or before long weekends, it may be worth investigating further. Consistent patterns of questionable personal leave should be documented.

Handling suspected fraud requires caution. Jumping straight to disciplinary action without proper evidence can backfire.  A couple of things you can do to support any investigation are:

• Documentation: Always keep records of approved and declined requests for annual leave. The rejected leave paper trail will help support you in any investigation where you suspect fraudulent use of personal leave
  
  
• Medical certificates: As mentioned earlier, request a medical certificate. As an employer, you can request evidence for as little as one day off.  Aside from helping you determine whether or not the leave is legitimate, an employee who doesn’t provide a certificate when asked may not be entitled to be paid for sick or carer’s leave.  Note that a medical certificate is very easy to obtain, however, it must satisfy a ‘reasonable person’ as to its validity. It is perfectly reasonable to require more information from someone treating practitioner when a sick leave period coincides with a rejected annual leave request period.
  

While it is natural to be suspicious about someone calling in ill at the exact period that an annual leave request was rejected, there might be a legitimate situation occurring.  You need to follow due process and allow for procedural fairness so if you are unsure of how to do this, please contact the HR Staff n’ Stuff team for support.

But I won’t be liked…

Leadership is not a popularity contest.  Sometimes you must make hard decisions and saying no to an annual leave request might be one of those tough conversations you need to have with a team member.  It all comes down to how you manage the situation. 

For example, you approved Jane’s leave six months ago and she has booked her flights and accommodation based on your approval.  It’s all non-refundable.  Geroge is now asking for the same period because he wants to head up the coast to do some surfing.  They both work in the same area and having both off on leave  at the same time is really going to leave you in a hole when it comes to servicing clients.  In this situation, a frank conversation with George about the need for him to adjust his dates is reasonable. 

However, if George needed the leave to attend a wedding overseas, you are looking at a different situation.  Jane has booked and paid and it would cost her significantly to cancel and rebook.  George can’t be flexible on the dates due to the wedding events that have been planned.  These circumstances are challenging and while it will be difficult for the business, both have provided enough notice to enable you to look at how you can manage both being out of the business at the same time. 

You still have the right to reject Geroge’s request but it is likely to cause resentment and longer term issues. Instead, you work with your team on how to manage the staffing gap either by fast tracking some of the work before they leave or upskilling another team member or back filling the role in the short term.

Ultimately, leaders have an obligation to the business first.  If the business needs aren’t being looked after, there won’t be a role for anyone to come back to after their leave!

Best practice for preventing issues around annual leave

The best way to avoid conflicts over leave requests and prevent misuse of sick leave is by implementing proactive strategies. Here are a few tips:

• Set clear expectations early: Make sure your employees understand how the leave approval process works, what factors are considered, and the importance of providing sufficient notice. New employees should be provided with the policies and all employees should know what they are and where they can access them.
  
  
• Encourage forward planning: Urge employees to submit leave requests well in advance. The earlier you know, the easier it is to manage resources.
  
  
• Be flexible if possible: Employees appreciate flexibility. If you can accommodate someone’s leave request without significantly disrupting operations, do so. This fosters goodwill and reduces the likelihood of conflict.
  
  
• Monitor and rotate high demand periods: As mentioned earlier, a rotation system can prevent the same employees from taking leave during high-demand times each year. 
  
  
• Foster a culture of open communication: Encourage employees to discuss their leave plans and potential conflicts early. This reduces the likelihood of last-minute leave requests or dissatisfaction if a request is denied. A shared annual leave calendar can be very helpful in allowing everyone to know when others have already submitted requests so that duplication can be minimised.
  
  
• Be consistent: You have a policy in place and you do need to adhere to it wherever possible.  Too many exceptions will have you cast as the boss who plays favourites.  Consistency allows your team to feel confident in your approach to approvals and know what is expected of them. 
  

Managing annual leave can be a complex balancing act, but with the right policy and approach, it doesn’t have to be a source of stress for you or your employees. By implementing clear policies, considering fairness, and staying flexible when possible, you can ensure the needs of both your team and your business are met. And in those unfortunate cases where sick leave fraud is suspected, having a clear procedure to follow can protect both your business and your employees’ rights.

If you need policies drafted or are unsure if your current ones are fit for purpose, or if you need advice on how to manage a situation where you suspect fraudulent use of personal leave, HR Staff n' Stuff can help - contact us to discuss.