Many Employees Not Using Their Annual Leave: What Employers Need to Know
More than 40% of Irish workers are failing to use their full annual leave entitlement, according to recent research by FRS Recruitment. Its 2026 Annual Leave Report found that 43% of employees did not take all of their annual leave, with almost three in ten missing out on five days or more.
While employees may choose not to take their full annual leave for a variety of reasons, including workload pressures, personal commitments or a preference to carry days over into the following year, unused annual leave is also an important compliance issue for employers.
Under the Organisation of Working Time Act 1997, employers have a responsibility to ensure employees are given the opportunity to take their annual leave within the relevant leave year, or within the permitted carry-over period where applicable.
Simply allowing employees to decide when, or whether, they take their annual leave is not enough. Employers should actively monitor annual leave balances, remind employees to use their entitlement and have clear procedures in place to manage outstanding leave.
We look at what Irish employers need to know about annual leave obligations and the practical steps they should take to ensure employees are using their full entitlement.
Annual leave: What does the law say?
Under the Organisation of Working Time Act 1997, employees are entitled to paid annual leave, with most employees receiving four working weeks per leave year, depending on their hours worked.
Section 20 of the Act sets out the requirements regarding when annual leave should be taken and places responsibility on the employer to determine when annual leave is granted.
In doing so, employers must take into account:
- The employee's need to reconcile work and family responsibilities.
- The opportunities available to the employee for rest and recreation.
- The employer's operational requirements.
When should annual leave be taken?
Annual leave should generally be taken within the leave year to which it relates.
However, under Section 20 of the Organisation of Working Time Act, annual leave can be carried over into the following six months, with agreement.
Some employers operate a shorter carry over period through their annual leave policy, for example, requiring outstanding leave to be taken within the first three months of the following leave year. This can help prevent employees building up excessive leave balances and ensure outstanding leave is used promptly.
Employers should clearly communicate their carry over arrangements and ensure employees are aware of the applicable deadlines.
There is also a specific exception for employees who are unable to take annual leave due to certified illness. In these circumstances, statutory annual leave can be carried over for up to 15 months after the end of the leave year in which it accrued.
Importantly, employers cannot simply allow unused annual leave to expire without taking reasonable steps to ensure employees have had a genuine opportunity to take it.
What happens if employees do not take their annual leave?
One of the most common misconceptions among employers is that if an employee does not request or book their annual leave, the responsibility rests entirely with the employee.
This is not the case.
Employers must take active steps to ensure employees are given a genuine opportunity to take their annual leave and are made aware that their entitlement may be lost if it is not used within the applicable timeframe.
In a recent example highlighted in the WRC's 2025 Case Report, Martin Beirne v Health Service Executive, ADJ-00040093, the employee brought a complaint seeking payment for 104 days of outstanding annual leave accumulated over a number of years.
The employee maintained that his workload had prevented him from taking his full annual leave entitlement and that he had never been advised that he needed approval to carry leave forward or that unused leave could be lost.
The employer argued that the employee was responsible for booking his own annual leave and had not sought permission to carry it over.
However, the WRC found that the responsibility rested with the employer to ensure the employee was given the opportunity to take paid annual leave and was specifically informed that the entitlement could be lost if not taken.
As there had been no communication with the employee about his annual leave entitlement or the consequences of failing to take it, the WRC upheld the complaint.
The employee was awarded a cesser payment of €31,666.78, representing payment for 104 days of outstanding annual leave.
This decision is an important reminder that employers should not assume that employees are solely responsible for managing their annual leave balances. Employers must be proactive in encouraging employees to take their leave and maintaining appropriate records of the steps taken.
What should employers be doing to manage annual leave?
Employers should take a proactive approach to managing annual leave throughout the year.
- Review annual leave balances quarterly and identify employees with outstanding leave.
- Send regular reminders encouraging employees to plan and book their annual leave.
- Contact employees individually where significant balances remain and ask them to submit preferred dates within four weeks.
- Where leave remains unbooked, consult with the employee and, where necessary, nominate dates in line with statutory notice requirements.
- Keep clear records of reminders, discussions and agreed leave arrangements.
Regular monitoring and communication can help ensure employees take their full entitlement while reducing the risk of outstanding leave accumulating.
Can an employer nominate annual leave days for employees?
Under Section 20 of the Organisation of Working Time Act 1997, the employer determines when annual leave is granted, taking account of operational requirements, the employee's family responsibilities and opportunities for rest and recreation.
This means employers do not have to rely entirely on employees requesting their own annual leave.
Where an employee has failed to book sufficient leave, the employer can nominate dates for the employee to take their outstanding entitlement, provided the appropriate consultation and notice requirements are followed.
Employers should ensure their annual leave policy clearly provides for this arrangement and that employees are aware of it.
For example, where an employee has 10 days of annual leave remaining towards the end of the leave year, the employer could write to the employee requesting that they submit their preferred dates within four weeks.
If the employee does not respond or fails to make arrangements to take the leave, the employer can then consult with the employee regarding suitable dates and give at least one month's notice of the dates it intends to allocate.
This approach helps employers manage annual leave balances while ensuring employees receive their full opportunity to take time away from work.
Key takeaway for employers
Annual leave is an important employee entitlement and plays a significant role in supporting employee wellbeing, work-life balance and productivity.
With this recent research employers should not simply assume that employees will manage their own leave or that unused days can automatically be lost at the end of the leave year.
Employers must remember they have an obligation to ensure employees taken their annual leave.
Having a clear annual leave policy, regularly reviewing outstanding balances, issuing employee reminders and following up individually where necessary will help employers manage annual leave effectively and reduce the risk of non-compliance.
Our advice: Do not wait until the end of the year to review annual leave balances. A quarterly review, supported by regular employee reminders and a clear process for managing outstanding leave, can make a significant difference.
For advice and support on reviewing your annual leave policy, managing employee leave entitlements and ensuring compliance with Irish employment legislation, contact MSS The HR People at info@mssthehrpeople.ie or call 01 887 0690.
