When “Use It or Lose It” Doesn’t Hold Up: Lessons from a Recent WRC Decision
Annual leave is more than a perk. It’s a legal and fundamental right. A recent Workplace Relations Commission (WRC) decision, ADJ-00056116 published earlier this month, has underlined the risks for employers who do not actively manage staff leave. The outcome? An employer was ordered to pay over €10,500 to a former employee for untaken holidays relating to a period of 4 years.
So what happened, and what should employers take away from this ruling?
The case in brief
The employee resigned in July 2024, having built up 40 days of untaken leave between 2019 and 2023. While the employer argued that the contract required holidays to be taken within the calendar year, the WRC found this was not enough and the Respondent’s complaint under the Organisation of Working Time Act 1997 succeeded. The WRC concluded that because the employer had not properly facilitated or encouraged the employee to take annual leave, the entitlement carried over and became payable on termination.
Why the claim succeeded
The key issue was not whether the contract mentioned a “use it or lose it” approach - it did. The problem was that the employer could not show that:
The employee had been clearly informed of their entitlement.
The employee had been encouraged to take leave during the year.
The employee had been warned that untaken leave might be lost.
The WRC relied on European law and case precedent, which state that annual leave cannot simply lapse if the employee has not been given a genuine opportunity to take it.
What this means for employers
This case highlights a crucial point: the responsibility rests with the employer. It is not enough to have a policy written in a contract or handbook (and in this case, the handbook wasn’t even provided). Employers must actively manage leave to ensure staff take their entitlement. It is important to remember in these scenarios that senior employees are covered by the regulations. Being in a management or high-pressure role does not diminish the right to annual leave or the employer’s duty to facilitate it.
Practical steps to protect your organisation
To avoid similar claims, employers should:
Keep proper leave records: track requests, approvals, and balances.
Remind employees regularly of their entitlement.
Encourage time off and avoid a culture where staff feel pressured not to take leave.
Warn employees clearly if untaken leave cannot be carried forward.
Plan workloads so staff can realistically take holidays.
Provide accessible policies and ensure employees actually receive them.
By embedding annual leave checks into mid-year and end-of-year reviews, managers can spot issues early and intervene before large balances build up.
The bigger picture
This WRC decision is a timely reminder that annual leave is a health and wellbeing safeguard, not just an administrative formality. Employers who fail to support staff in taking leave risk not only financial liability, but also reduced employee wellbeing and productivity. When employees are given real opportunities to rest and recharge, everyone benefits.
Link to WRC Adjudication Decision: https://www.workplacerelations.ie/en/cases/2025/september/adj-00056116.html
