Carry over of annual leave

The government have introduced a temporary new law to deal with coronavirus disruption. A temporary amend to the Working Time Regulations was made.

Written on April 2, 2020 by Xeinadin Group

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What is the amendment to the law?
All employers are subject to the Working Time Regulations 1998, and thus will be subject to the changes in the Working Time (Coronavirus) (Amendment) Regulations 2020.

This means that any employees and workers can carry over up to 4 weeks’ paid holiday over a 2-year period, if they cannot take holiday due to coronavirus.

Who is eligible?

This applies to all employees and workers’ but does not apply to the self-employed.

In what circumstances should the carry-over of annual leave be granted?

Carry over of annual leave, will be granted for the following reasons:

  • An employee has been self-isolating or is too sick to take annual leave before the end of their holiday leave year;
  • An employee has been temporarily sent home as there’s no work (‘laid off’ or ‘put on furlough’);
  • An employee had to continue working due to the increased pressure and workload created as a result of the coronavirus and could not take paid annual leave.

Does this mean that an employee, who can no longer go abroad due to the travel ban, can cancel their holiday and carry it over?

If there is no business need for the employee to be in work, then there is no need to cancel the booked annual leave.  They should take this as planned, but at home instead of abroad.

There is no obligation to accept the request to cancel annual leave.  Of course, businesses can use their discretion, and may allow the employee to cancel their holiday and continue to work – therefore carrying this annual leave over.

What happens to the upcoming bank holidays?

If an employee is unable to take any of the bank holidays due to being furloughed, the entitlement should be rolled over, and these should be used over the next 2 years.

Can we pay employees for annual leave and bank holidays not taken?

There is an obligation on an employer to ensure that their workers have adequate opportunity to take their annual leave. Annual leave cannot be replaced with a payment in lieu unless the worker is leaving employment. 

Can I force employees to take annual leave?

If there is a clause in your contracts of employment that allows for this, then yes.  However, if not, or you wish to enforce the taking of annual leave, over and above the provision in the contracts, then you are required to give two days' notice for every day you want them to take. i.e. you want an employee to take 5 days annual leave.  You must give them 10 days’ notice.

What happens if an employee leaves, before the 2-year period?

If an employee or worker leaves their job or is dismissed during the 2-year period, any untaken paid holiday must be added to their final pay (‘paid in lieu’). 

Do employees accrue annual leave when furloughed?

Yes, accrual of annual leave continues.

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