Covid-19: Rules on carrying over annual leave

On Thursday 26 March, in response to the current pandemic, the Working Time (Coronavirus)(Amendment) Regulations 2020 came into force. These Regulations will allow workers who have not yet taken all of their statutory annual leave due to Coronavirus to carry it over into the next two leave years.

What is the current position?

Under the Working Time Regulations 1998, workers are entitled to 5.6 weeks’ annual leave, including bank holidays, each year. In accordance with regulation 13(9)(a), four of these weeks must be taken in the leave year in respect of which they are due.

This means that although employers can allow workers to ‘buy’, ‘sell’ or ‘carry over’ holiday each year, the majority of their entitlement cannot be carried between leave years. Workers will subsequently lose these holidays if they are not taken. There is also an obligation on employers to ensure that workers take their full statutory entitlement to annual leave in any one year. Failure to do so could result in a financial penalty for the employer.

What is the position now?

Under the new legislation, regulations 13(10) and 13(11) provide that where it is not reasonably practicable for a worker to take some or all of their annual leave as a result of the effects of Coronavirus, they will be able to carry over up to four weeks leave into the next two leave years immediately following the leave year in respect of which that leave was due. The regulations confirm that the ‘effects of Coronavirus’ will not just be limited to a worker’s health but will also include effects on the employer and on the wider economy or society as a whole.

Under new regulation 13(12), an employer may also require a worker not to take this leave on particular days, as provided for in regulation 15(2), where they have a good reason to do so. Employers will be able to refuse permission for leave to be taken in the current leave year and instead it will be carried over. However, while employers will be able to allow or even insist that workers carry over holiday, this does not mean that employers have to do so.

What does the change mean?

The temporary relaxation of regulation 13(9) will ease the requirement on businesses to ensure that workers take their full statutory entitlement of annual leave in any one year. Employers will not need to worry that if they allow the majority of their workforce to defer their annual leave until the current restrictions are lifted, they will be faced with accommodating too many workers wanting to take holiday at the same time.

Employers who want their workers to take holiday can still require workers to take it, under the provisions of the 1998 Regulations, which in summary require employers to give workers notice of twice the period of the leave that the worker is being required to take.

The new regulations will allow workers to continue working in the national effort against Coronavirus without losing out on annual leave entitlement, providing much needed flexibility for employers and workers alike.

If you have any questions regarding this topic, please contact any member of the Employment Team.

For an update on all the legal implications relating to Coronavirus please see here.

Please note that this blog is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content of this blog.

Edwin Coe LLP is a Limited Liability Partnership, registered in England & Wales (No.OC326366). The Firm is authorised and regulated by the Solicitors Regulation Authority. A list of members of the LLP is available for inspection at our registered office address: 2 Stone Buildings, Lincoln’s Inn, London, WC2A 3TH. “Partner” denotes a member of the LLP or an employee or consultant with the equivalent standing.

Please also see a copy of our terms of use here in respect of our website which apply also to all of our blogs.