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On 26 March 2020, the Government introduced a temporary change to the Working Time Regulations 1998 (WTR). New guidance released on 13 May 2020 further details the changes and clarifies the position on carrying over annual leave.
What are the normal rules on holiday entitlement?
The WTR grant most workers 5.6 weeks’ paid leave entitlement each year. This entitlement cannot be carried over into subsequent holiday years. There are exceptions to this, including where the employer and employee agree to carry-over up to 1.6 weeks (the maximum allowed) of statutory leave into the following year, and where an employee has not been able to take their statutory leave due to sickness or family leave.
The key change - clarification on carry-over
The guidance states that where it has not been “reasonably practicable” for the worker to take some or all of the 4 weeks’ holiday due to the effects of coronavirus, the untaken amount may be carried forward into the following two leave years.
The “reasonably practicable” element means that coronavirus will need to have had an impact on the worker’s ability to take their leave.
Various factors should be taken into account when considering whether it was not reasonably practicable for a worker to take leave. The government has issued guidance and examples on their website to help with this. The underlying theme in all of the examples is for the employer to consider practical alternatives to avoid an employee carrying over their leave.
The guidance suggests that employees on furlough are unlikely to need to carry forward annual leave, as they will be able to take it during the furlough period. Employers should remember however that a furloughed worker is entitled to holiday pay at their normal rate of pay (being their pre-furloughed pay). Therefore, where, due to the impact of coronavirus, the employer is financially unable to top up the employee’s pay to full holiday pay the worker may be able to carry-over their leave entitlement.
How can employers manage extra annual leave?
- Review and monitor individual holiday allowances over the coming months. Ask yourself when you may need staff most in light of current events.
- Unless the employment contract says otherwise, an employer can require an employee to take statutory holiday on specified dates, whether or not the employee is on furlough leave, provided the required notice is given which is twice the period of holiday you require the employee to use eg a request to take 2 weeks’ holiday requires 4 weeks’ notice. So, in light of the answer to point 1 above you may wish to consider requiring employees to take their holiday at certain times.
- Subject to the employment contract, an employer can require a worker not to take their carried-over leave on days requested by a worker by giving notice at least as many calendar days before the date on which the requested leave was due to start as the number of days being refused. So, for example, to refuse 4 days out of a 5 day holiday request you would have to give notice at least 4 calendar days before the date on which the leave was due to start.
- Employers can require workers to take holiday while on furlough, provided the requisite notice requirements are met and employers are mindful of an employee’s ability to ‘rest, relax and enjoy leisure time’ which is the fundamental purpose of a holiday.