Many businesses close for a period each year, a Christmas shutdown, a summer break, or a temporary closure. A common question is whether the employer can make staff use their annual leave during that closure, and what happens to leave that is left over. Here is a plain-English guide for England and Wales under the Working Time Regulations 1998.
Can an employer require staff to take leave during a shutdown?
Yes. Under the Working Time Regulations 1998, an employer can require workers to take their statutory annual leave on particular days (for example, during a business shutdown), provided it gives the correct notice (and subject to anything different in the contract or a collective agreement).
The notice rule
The Regulations set a default notice requirement: to require a worker to take leave on specified days, the employer must give notice of at least twice the length of the leave it wants the worker to take. So:
- to make staff take 5 days' leave over a shutdown, give at least 10 days' notice;
- to make them take 1 week, give at least 2 weeks' notice.
(The contract can set different notice arrangements, so check it. Many contracts simply state that a fixed number of days must be reserved for the Christmas shutdown.)
What if a worker hasn't accrued enough leave?
For new starters or those who have already used most of their leave, a shutdown can be awkward. Options (depending on the contract) include allowing the worker to take leave in advance, agreeing unpaid leave for the shortfall, or paying them for the closure days. Be careful not to leave a worker out of pocket or below their statutory entitlement.
How much leave is there to "use up"?
Statutory minimum holiday is 5.6 weeks a year (up to 28 days for a five-day-week worker), which can include bank holidays depending on the contract. A shutdown commonly absorbs part of this entitlement, but an employer cannot force a worker to take more leave than they have, or below their statutory minimum across the year.
What about untaken leave when the business closes permanently?
If the business closes for good (and employment ends, e.g. by redundancy), the worker must be paid in lieu of any statutory holiday accrued but not taken by the termination date. Holiday pay on termination is a legal entitlement, separate from redundancy pay.
Practical tips for employers
- Check the contract first, it may already deal with shutdowns and notice.
- Give the correct notice (default: twice the leave required), and ideally set out shutdown dates well in advance, or in the contract/handbook.
- Plan for new starters and those low on leave (advance leave, unpaid leave or paid closure).
- On any permanent closure/redundancy, calculate and pay accrued untaken holiday.
Key takeaways
- Employers can require staff to take annual leave during a shutdown, under the Working Time Regulations 1998, with the right notice.
- The default notice to require leave is at least twice the length of the leave (e.g. 10 days' notice for 5 days' leave), unless the contract says otherwise.
- Make arrangements for new starters / those low on leave so they aren't left out of pocket or below the statutory minimum.
- On permanent closure/redundancy, pay accrued untaken holiday on termination.
Sources
- Working Time Regulations 1998 (annual leave; employer's right to require leave on notice of twice the leave length; payment for untaken leave on termination)
- Statutory holiday entitlement of 5.6 weeks; contractual and collective-agreement variations
- Employment Rights Act 1996 (payments due on termination)
--- This article is general information about the law of England & Wales as at 2026, not legal advice. For advice on your circumstances, consult a qualified solicitor or HR professional.