Can employees be treated differently with regard to annual leave?

My employer refused my holiday request last year for Xmas week off, saying it was company policy not to agree to holidays after 15 December. But then I discovered a co-worker was allowed to take the whole of xmas week off! They have just agreed someone else’s holidays for xmas week this year… but I can’t have that week because of company policy! Are they allowed to treat employees so differently?

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The starting point would be to look at the actual policy to see if it is being followed.

You mention that the issue was when you made your application so could it be that your colleagues had made applications for the same time prior to the 15th December?

Depending on the reason for the seemingly unfair treatment, unless it is on the grounds of a protection afforded you in law ie one of the protected characteristics, in which case it would be unlawful, then there is probably little you can do about it other than to raise it formally with your employer and ask for an explanation based on the treatment of your application and why others were allowed the time off and not you.