Christmas shutdown is a common practice in the UK and many other countries, where employers close operations for a period around Christmas and require employees to take annual leave. However, the rules around mandatory shutdowns, employee entitlements, and how to handle the leave deduction are often misunderstood.
This guide covers Christmas shutdown rules in the UK, explains what employers can and cannot require, and helps you manage the shutdown period fairly and legally.
This article is general information, not legal advice.
Key Takeaways
- Employers can require employees to take annual leave during a Christmas shutdown
- The shutdown period must be reasonably notified in advance
- Public holidays during the shutdown are not deducted from annual leave
- Employees with insufficient leave may be placed on unpaid leave
- The employment contract should address shutdown provisions
Can Employers Require a Christmas Shutdown?
Yes — With Conditions
UK employers can require employees to take annual leave during a Christmas shutdown, provided:
- The contract permits it — the employment agreement or staff handbook includes a shutdown provision
- Reasonable notice is given — typically at least twice the length of the shutdown period
- The shutdown is a genuine business need — not a tactic to avoid paying wages
The Contract Is Key
If the employment contract includes a shutdown clause (e.g., “the company closes between Christmas and New Year, and employees must take annual leave”), the employer can enforce it.
If there is no shutdown clause, the employer needs the employee’s agreement to require leave during the shutdown.
Typical Shutdown Period
Standard UK Shutdown
Most UK companies close for:
| Period | Days | Annual Leave Required |
|---|---|---|
| Christmas Eve to New Year’s Day | 5-7 working days | 3-5 days (after deducting bank holidays) |
| Extended shutdown (24 Dec - 1 Jan) | 7-8 working days | 4-5 days (after deducting bank holidays) |
Public Holidays During Shutdown
The following are public holidays in 2026 and not deducted from annual leave:
| Date | Holiday |
|---|---|
| 25 December | Christmas Day |
| 26 December | Boxing Day (observed Monday 28 in Scotland/NI) |
Note: In England/Wales, Boxing Day falls on a Saturday in 2026, so there is no substitute Monday unless the employer offers one.
Employee Entitlements During Shutdown
Salaried Employees
Salaried employees receive their normal salary during the shutdown period, including the annual leave days and public holidays.
Hourly Employees
Hourly employees receive pay for:
- Annual leave days: Relevant daily pay
- Public holidays: Normal holiday pay
- Remaining days: Unpaid (if annual leave is exhausted)
Employees with Insufficient Leave
If an employee does not have enough annual leave to cover the shutdown:
- Option 1: Place on unpaid leave for the remaining days
- Option 2: Allow the employee to take the days as “negative leave” (to be earned back)
- Option 3: Negotiate alternative arrangements
Planning the Shutdown
Notify Early
Give employees as much notice as possible. Best practice is:
- Minimum: Twice the length of the shutdown period
- Recommended: At least 2-3 months’ notice
- Ideal: Include shutdown dates in the employment contract
Publish the Calendar
At the start of each year, publish:
- The exact shutdown dates
- Which public holidays fall within the shutdown
- How annual leave will be deducted
- What happens for employees with insufficient leave
Handle Exceptions
Consider exceptions for:
- Employees with religious obligations during the shutdown period
- Employees who cannot take annual leave at that time (e.g., seasonal workers)
- Employees with insufficient leave
Common Mistakes
Not Having a Shutdown Clause
Without a contract provision, you cannot unilaterally require employees to take annual leave during a shutdown. Add the clause to contracts and handbooks.
Deducting Public Holidays from Annual Leave
Public holidays during the shutdown are not annual leave. Do not deduct Christmas Day or Boxing Day from the leave balance.
Not Giving Adequate Notice
Failing to give reasonable notice may invalidate the shutdown requirement. Give at least twice the shutdown period as notice.
Placing Employees on Unpaid Leave Without Agreement
If an employee has insufficient leave, discuss the options before placing them on unpaid leave. Unilateral action may breach the contract.
Frequently Asked Questions
Can my employer force me to take annual leave at Christmas?
Yes, if the employment contract includes a shutdown clause and reasonable notice is given. The employer can require you to take annual leave during a genuine business shutdown.
What if I don’t have enough annual leave?
You may be placed on unpaid leave for the remaining days. Alternatively, you can negotiate with your employer for “negative leave” (to be earned back) or other arrangements.
Are public holidays deducted from my annual leave during shutdown?
No. Public holidays (Christmas Day, Boxing Day) are separate from annual leave. They are not deducted from your balance.
How much notice must my employer give?
Best practice is at least twice the length of the shutdown period. For a 5-day shutdown, give 10 working days’ notice minimum. More notice is better.
Can I refuse to take annual leave at Christmas?
If the contract includes a shutdown clause and proper notice is given, you generally cannot refuse. However, if there is no shutdown clause, your agreement is required.