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In these unprecedented times, it may not be possible for the employees to take all their holiday entitlement before the end of their leave year. Most of the stuff are either self-isolating or are too sick due to the coronavirus pandemic. By the same token, the employers are faced with the great risk on their businesses of allowing employees to take time off once restrictions have been lifted.

 In response to these concerns, the government has introduced new rules on carrying over annual leave into the next 2 leave years. The new regulation came into force on 26th March 2020.

For support from a professional, reliable employment law specialists, contact us today or visit our For Employers page.

1. The current position – “no carry over” rule

Under Working Time Regulations 1998 (‘WTR’), workers must receive a minimum annual leave of 5.6 weeks paid holiday (‘statutory leave’). In other words, a full-time employee who works a 5-day week is entitled to 28 paid holidays each year (including bank holidays). This is made up of a ‘four weeks’ annual leave that derives from the EU Working Time Directive and a further ‘1,6 weeks’ annual leave that comes from UK domestic legislation. 

Under the 'no carry over rule’, workers must take their ‘four weeks’ holiday each leave year, otherwise this will be lost. In other words, this type of holiday entitlement is not allowed to be carried over from one year to the next unless in exceptional circumstances. However, this is not an automatic loss of holiday. The employer is required to ensure that the worker has been given an effective opportunity to take the holiday in the year in which it is due and the worker deliberately refused it. Payment in lieu of statutory holiday is not allowed, except on termination. Alternatively, it is possible for an employer to agree for the worker to carry over his annual leave into the following year, but the worker cannot compel the employer to agree. 

By contrast, WTR allows the remaining ‘1,6 weeks’ statutory leave to be carried over to the following leave year, subject to a ‘relevant agreement’ such as the contract of employment, staff handbook or collective agreement. 

Part time workers are also entitled to annual leave on a pro rata basis and they are also subject to the above WTR rules. 

2. Changes in law – Working Time (Coronavirus) (Amendement) Regulations 2020

The new law - Working Time (Coronavirus) (Amendment) Regulations 2020 has relaxed the rules in relation to annual leave. Thus, the employees can defer their “four weeks” unused annual leave entitlement over the next two leave years. 

The amendment applies to almost all workers, including agency workers and workers on zero-hours contracts. Like the WTR, the new provisions do not apply to workers which are subject to a different set of regulations such as sea-fishermen, workers on all ships. Here we consider the key points. 

I) ‘Not reasonably practicable’ requirement

The new rules introduce a requirement for worker who request carry-over leave, namely that it was "not reasonably practicable" to take some or all their leave due to the coronavirus. Unfortunately, the regulations do not provide a definition for what is and what is not “not reasonably practicable". This would be a matter of fact, to be determined on a case by case basis. Putting very simply, this should not be used if the worker’s ability to take their leave is not genuinely and significantly affected by the Coronavirus pandemic.

II) The ‘good reason’ requirement

The employers is also restricted by the new laws in exercising their right to refuse a worker’s carry over leave request. Under the WTR, the employer may prevent an employee from taking annual leave by giving advance notice of at least as many days as the leave that is being refused. The new regulations impose a new hurdle, stating that the employer must have ‘good reason’ to do so. Again, the regulations do not provide a definition for the term “good reason". This would be a matter of fact to be decided. However, it is likely that an employer providing an essential service such as food, healthcare might be able to refuse a carry-over request.

3. Unaltered provisions

The new law does not apply to the carry over ‘1.6 weeks’ leave which already has been granted by WTR. Therefore, at present workers can carry their ‘four weeks’ holiday over a period of up to two years and the ‘1.6 weeks’ holiday only one year by agreement between workers and employers. Unfortunately, neither WTR, nor the new law provide any assistance on determining which type of leave are deemed taken first. The best approach to this is for the worker and the employer to try to reach an agreement.

Under the WTR an employer can require an employee to take statutory holiday provided that the employer sends the worker the required notice. This provision has not been modified by the new law, but careful consideration should be given when the employer exercise this right in such circumstances as the lockdown. An agreement with the employee is recommended. 

The agreement between the employer and the worker for the worker to carry over his annual leave into the following year remain also unchanged and are governed by the contractual terms. 

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This amendment is a welcomed piece of legislations for the workers who are at the risk of losing their annual leave entitlement but also offers a greater flexibility to the employers to manage their stuff. If you are a business looking for assistance in implementing this scheme or further advice on how to support your staff please contact our team of employment specialists today.

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