Annual Leave Policy

Why your team needs this policy

A clear annual leave policy does more than tick a compliance box. It directly affects how your team plans their time, how managers handle requests, and whether your business avoids disputes down the line. Employees who understand their leave entitlement from day one are less likely to raise queries, less likely to feel short-changed, and more likely to actually take their leave — which reduces burnout and improves retention.

There is also a commercial argument. Businesses that manage leave well experience smoother operations. When leave is planned and tracked properly, managers can maintain adequate staffing levels, avoid last-minute scrambles for cover, and reduce the reliance on expensive agency staff. In hospitality, where margins are tight and staffing is a constant challenge, this matters enormously.

What to cover in your policy video

State the entitlement clearly. Open your video by explaining exactly how much leave your team receives. Cover the statutory minimum for your location, any additional days you offer above the minimum, and whether bank or public holidays are included within the entitlement or provided on top of it. Even where the rules are straightforward, saying it out loud in a video removes ambiguity.

Explain how to request leave. Walk through the process: how requests are submitted, how far in advance they should be made, blackout periods if applicable, and what happens when requests conflict. Show your team where to find the request feature in your system so they can act on it immediately.

Cover accrual rules. Explain how leave builds up, especially for part-time, casual, or variable-hours workers whose entitlements are pro-rated. Many disputes arise from poor understanding of accrual, so addressing it directly in your video prevents confusion later.

Encourage people to take their leave. Use your video to set the tone: taking leave is expected, not discouraged. A culture where leave goes unused is a sign of poor planning or excessive workloads. In many locations, employers are legally required to actively facilitate leave-taking, so make it clear that you want your team to use their days.

Address peak periods. In hospitality, retail, and seasonal industries, certain periods see higher leave requests. Explain how conflicting requests are handled — whether that is first-come-first-served, rotation, or seniority-based. Publishing these rules in advance means staff know what to expect.

Clarify carry-over rules. Explain whether unused leave can be carried into the next year and, if so, how much and by when it must be used. Check the rules for your location before imposing a strict use-it-or-lose-it policy — in many jurisdictions, employers must allow carry-over in specific circumstances such as long-term sickness or parental leave.

Set out the process for approvals and declines. Every employee should understand the timeline for receiving a response and the grounds on which a request might be declined. Keeping a log of approvals and declines helps demonstrate fairness if decisions are ever questioned.

Mention regular audits. Let your team know that leave balances are reviewed regularly to catch any anomalies — employees not taking leave, incorrect calculations for part-time workers, or carry-over limits not being applied properly. This builds trust and shows due diligence.

How to structure your video

Keep it under five minutes. Annual leave is a topic most people already have a basic understanding of. Your video is there to explain your specific rules, not teach the concept from scratch. Aim for three to five minutes — long enough to cover the key points, short enough that people will actually watch it.

Have the right person present. This should come from whoever handles leave requests day-to-day — usually the general manager or operations manager. Hearing the policy from the person who will approve or decline requests gives it more weight than a generic HR script.

Use a simple structure. Open with the headline entitlement ("You get X days per year, and here's how that works"). Then walk through the request process. Then cover the edge cases — carry-over, peak periods, what happens when you leave. Close by pointing people to where they can check their balance and submit requests.

Show, don't just tell. If your team uses an app or system to request leave, screen-record the process and include it in your video. Showing someone how to submit a request takes thirty seconds and eliminates a whole category of "how do I...?" questions.

Address different contract types. If you employ a mix of full-time, part-time, and casual staff, explain how the entitlement differs for each. This is one of the most common sources of confusion and complaint. You don't need to quote legislation — just explain the numbers clearly.

Record separate videos if needed. If your rules are meaningfully different for different teams, locations, or contract types, consider recording separate short videos rather than one long one that tries to cover everything. A three-minute video that speaks directly to your situation is more useful than a ten-minute video where half the content doesn't apply to you.

Common questions your team will ask

After watching your video, these are the questions that will come up. Anticipate them in your recording or be ready to answer them via messaging:

• "Do bank holidays come out of my allowance?" — This varies by employer and location. Make your position explicit in the video so there is no room for interpretation.
• "What happens to my unused days at the end of the year?" — Cover your carry-over rules clearly. If the answer is "use it or lose it," say so — but check your local rules first.
• "How is my leave calculated if I work part-time?" — Pro-rata calculations confuse people. Give a worked example in your video: "If a full-time worker gets 28 days and you work three days a week, you get 16.8 days."
• "Can I take leave during my probation?" — Most jurisdictions allow leave from day one, but some employers restrict it during probation. State your policy clearly.
• "What happens to my leave if I'm off sick?" — In many locations, leave continues to accrue during sickness absence and may need to be carried over. Check the rules for your jurisdiction.
• "Do I get paid for unused leave when I resign?" — In most jurisdictions, yes. Explain how the calculation works and when they'll receive the payment.
• "Can my manager refuse my leave request?" — Explain the grounds on which a request might be declined and how much notice is required on both sides.

Official guidance

The rules on annual leave vary by location. Before recording your video, check the official guidance for your jurisdiction to make sure your policy meets the statutory minimum:

How Pilla helps

Pilla turns your annual leave policy into a living part of your employee handbook:

• Record your policy video — Film a short video explaining your annual leave policy, what employees need to know, and how it works in your organisation. Staff watch on their phone, and you track who has seen it.
• Onboarding integration — Include the annual leave policy as part of your onboarding checklist, so every new starter acknowledges it during induction.
• Policy updates — When your policy changes, push the updated video to all staff and track who has watched the new version.
• Audit trail — Every video view, policy acknowledgement, and onboarding completion is recorded with timestamps, ready for any compliance review.
• Messaging — Use in-app messaging to answer questions about annual leave directly, keeping sensitive conversations out of group chats.