Company-wide vacation

Quick Overview

• Your employer may require you to take company-wide vacation if there are serious operational reasons.
• They must notify you of the vacation dates in writing at least 14 days in advance, unless you agree otherwise.
• Collective leave may not generally exceed 2 weeks; for artistic ensembles, it may not exceed 4 weeks.
• If you’ve already used up your vacation time, that’s not your problem. Your employer must assign you work or provide wage compensation.
• Your employer cannot unilaterally order you to take unpaid leave.

Not sure if your employer has properly ordered a company-wide vacation or is forcing you to take unpaid leave? Describe your situation to us, and our attorney will explain what you’re entitled to and how to defend yourself.

What an employer can and cannot do

What Is a Company-Wide Vacation?

A company-wide vacation, also known as a collective vacation, is a vacation that applies to all employees of a specific plant or company . It involves halting all work for the duration of the vacation, during which employees are required to take time off. Such time off may apply to the entire company or only to a specific part of it (such as a particular workshop or department). Often, company-wide vacation does not apply to security or maintenance staff, for example.

What the Labor Code Says About Company-wide Vacation

The Labor Code allows an employer to mandate collective vacationtime only if it is necessary for operational reasons. Typically ,this involves a production shutdown, inventory, machine maintenance, operational repairs, or a period when the company cannot operate under normal conditions. If a labor union and an employee council are active at the employer’s company, the collective vacation must be determined in agreement with the labor union and with the consent of the employee council.

At the same time, an employer cannot set a company-wide vacation of any length. Collective vacation time may not exceed 2 weeks; for artistic ensembles, the maximum is 4 weeks. Your employer must notify you in writing of the vacation dates at least 14 days in advance, unless a shorter notice period is agreed upon with you.

The Labor Code regulates company-wide leave in such a way that an employer may order it only for serious operational reasons and in accordance with a pre-established leave schedule. In many companies, the leave schedule is part of the regular organizational process.

In practice, employers often publish the vacation schedule for the given year so that employees can respond in a timely manner and adjust their personal plans accordingly. This vacation schedule may apply to individual departments or the entire organization, depending on operational needs.

Employees are then required to adjust their schedules according to this vacation schedule, as the employer has the final say in approving specific dates for taking vacation. If the employer fails to publish the vacation schedule in a timely manner or does not allow sufficient flexibility, this can lead to problems with planning personal time off, especially if the vacation coincides with a company-wide shutdown.

It’s also important to note that an employer can cancel a scheduled vacation and even recall you from it. In this case, however, they are obligated to reimburse you for all costs you incurred as a result of the canceled vacation. For example, if you had already paid for non-refundable airline tickets and accommodations in Sri Lanka, your employer must compensate you for those costs.

The Labor Code also stipulates that an employer may, in agreement with the labor union and with the consent of the employee council, schedule a collective vacation period. However, this is only permitted if it is necessary for operational reasons (e.g., due to inventory, deep cleaning, machine maintenance, or repairs). Collective vacation time may not exceed 2 weeks, or 4 weeks for artistic ensembles. In practice, this will most often occur during the summer vacation period.

What if you’ve already used up your vacation time?

It may happen that you’ve already used up all your vacation time for the year. But now your employer has ordered another two weeks of collective vacation. So how does this work in this case?

In this case, your employer should assign you some work. However, if that is not possible, the employer is obligated to provide you with wage compensation, the amount of which should correspond to your average earnings. This compensation should therefore be equivalent to the pay you would receive if you were taking regular paid vacation.

Is your employer forcing you to take unpaid leave even though you’ve already used up your vacation time? Before agreeing to such an arrangement, make sure to verify whether you’re entitled to wage compensation.

However, your employer cannot order you to take unpaid leave. It is the employer’s responsibility to arrange your vacation, so this is an obstacle on the employer’s part. Therefore, it is solely the employer’s problem that you have already taken your vacation.

From our experience, we know that the biggest disputes do not arise because of the company-wide vacation itself, but because of poor communication or because the employer forces employees to take unpaid leave. A common mistake employees make is settling for a verbal explanation. If your employer claims you’re not entitled to pay, ask for a written statement.

Company-wide vacation during the probationary period

The probationary period is intended to allow both the employee and the employer to determine whether the working relationship is a good fit. In 2026, the probationary period may last up to 4 months for regular employees and up to 8 months for managerial employees. For fixed-term employment, it may not exceed half the agreed duration of the employment contract.

If a company-wide vacation occurs during your probationary period, your employer may require you to take vacation time even before you have earned full vacation entitlement. If this is not possible, your employer must assign you other work or resolve any obstacles on their end. Even during the probationary period, your employer cannot unilaterally order you to take unpaid leave.

Where You Might Encounter Collective Vacation Time

In practice, mass vacation time is often associated with production shutdowns or facility maintenance, which is why you’ll most commonly encounter the term “company-wide vacation.” You’re most likely to encounter plant-wide vacations in various factories and across different industrial sectors where regular maintenance, repairs, or equipment upgrades are required. A plant-wide vacation will likely affect you if you work in the following sectors:

• Manufacturing: Facilities involved in manufacturing are often subject to plant shutdowns for the maintenance of machinery, equipment, and infrastructure.
• Petrochemicals and Refining: Refineries and petrochemical plants typically have scheduled shutdowns for maintenance, inspections, and repairs to ensure safety and regulatory compliance.
• Power generation: Power plants typically have regular shutdowns for maintenance, inspections, or equipment upgrades.
• Mining: Mining operations require shutdowns for the maintenance of heavy machinery and processing plants, as well as for safety inspections.
• Performing Arts Groups: Company-wide vacations often extend to various performing arts groups, such as ballet companies or theaters. This typically occurs during the summer vacation period. The reason is that these troupes would not be able to function normally if performers were absent due to summer vacations.

Advantages and Disadvantages of a Company-wide Vacation

Pros

• No one is at work: And that means no one will call you during your vacation because they need help with something or want you to do something.
• Guaranteed vacation: With a company-wide vacation, you simply have the guarantee that you’ll get your vacation time. In some exceptional cases, your employer may carry over your vacation to the following year. However, this is only possible for operational reasons or due to an obstacle at work on the employer’s part.
• Improved work environment: During company-wide vacations, there are usually major cleanups, repairs, and upgrades. This means you’ll return to a cleaner and more efficient work environment. The improved work atmosphere is further enhanced by the fact that you and all your colleagues return to work well-rested.

Disadvantages

• Late Planning: If a company-wide vacation is an annual event at your company, it likely has a clearly set date. In this case, you’ll have time to prepare for your vacation in advance. However, problems can arise if the company-wide vacation is an unusual occurrence and your employer announces it only a few weeks in advance. In this case, you may run into trouble planning what you’ll do during your vacation. Not only will you have just a few weeks to decide, book your stay, and arrange your travel, but you’ll also have to, for example, find someone to look after your pets—which can be quite difficult to arrange in the summer, and even more so at the last minute.
• Other Plans: Maybe you’re not a fan of sunbathing in the summer and would rather spend three weeks somewhere in the mountains in the winter. In the case of a company-wide vacation, unfortunately, you’re out of luck and have to adapt to your employer’s plans.
• Partner with a company-wide vacation: If both you and your partner have a company-wide vacation at work, that’s when the real headaches can begin. Your vacation dates will likely not align, which will prevent you from going on a trip together.

As this comparison shows, company-wide vacations have more disadvantages than advantages. Unfortunately, however, the laws are clear on this matter, and you must adapt to your employer’s policies. Nevertheless, it’s almost always possible to reach a compromise and arrange, for example, unpaid leave at a different time. Alternatively, you always have the option of finding another job where company-wide vacations aren’t an issue.

If a dispute over vacation time has reached an impasse, we’ll help you prepare arguments for your employer or a written request so that it is factual, legally sound, and does not unnecessarily strain workplace relationships.

Summary

Your employer may mandate company-wide vacation in 2026 if there are serious operational reasons for doing so, such as a production shutdown, inventory, maintenance, or repairs. They must notify you of the dates in writing at least 14 days in advance, unless you agree otherwise, and the period of company-wide leave generally may not exceed 2 weeks, or 4 weeks for artistic ensembles. If you have already used up your vacation time, your employer cannot unilaterally order you to take unpaid leave—they must assign you work or provide wage compensation. An employee usually cannot object to a properly ordered company-wide vacation, but may challenge violations of the rules, late notice, unauthorized unpaid leave, or costs incurred due to the cancellation of a previously approved vacation.