Carrying your holiday leave over

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Will you take all your holiday leave before the end of the year?

We’re now at the end of the month and hopefully many of you will now have had the opportunity to take a holiday following the relaxing of lock-down rules from 4 July.

However, we expect not everyone will have been lucky enough to get a break and with only 5 months left until the end of the year and with colleagues wanting holiday at the same time, it might prove difficult to take your full leave entitlement.

So what can you do about it?

Normally, holiday must be used up in the leave year it’s granted and if you don’t use it, you lose it. However, the government has introduced a temporary new law allowing employees and workers to carry over up to 4 weeks’ paid holiday into their next 2 holiday leave years.

So, to be clear, it doesn’t apply to contractual holiday entitlement or the extra 1.6 weeks UK law allows – it only applies to 4 weeks of your leave.

The new law says that where it was “not reasonably practicable” for the worker to take some or all of their basic 4 week leave entitlement as a result of COVID-19, the worker may carry forward such untaken leave.

So, the law could apply, for example, to those who have been self-isolating or are too sick to take holiday before the end of their leave year or to those who have had to continue working and could not take paid holiday. It might also apply to those who have been ‘furloughed’ and cannot reasonably use their holiday in their current leave year.

Some employers will already have an agreement to carry over paid holiday – such agreements won’t be affected.

Leave carried over under the new law must be used within the 2 years immediately following the leave year in which it was due.

However, if an employee or worker leaves their job or is dismissed or made redundant and has carried over paid holiday because of coronavirus, then that untaken paid holiday must be added to their final pay (i.e. it must be ‘paid in lieu’).

The new regulations also contain a restriction on the employer’s right to refuse a worker’s request for leave that has been carried over. The employer has to have a “good reason” if it wants to refuse the worker’s request to take leave on particular days. The regulations don’t define what a “good reason” might be, so we wait in anticipation of the arguments to be made!

We also wait in anticipation for arguments about which 4 weeks of annual leave should be allowed to carry over. Is it only the 4 weeks you take or could take first in a leave year? Does it include bank holidays? It might well do, depending on the wording of the contract. So we anticipate the scenario where the employer says to a worker – “you’ve got 5.6 weeks’ annual leave, you’ve already taken 3 weeks of it taking into account bank holidays, so you can only carry over 1 week. The other 1.6 weeks are lost as you haven’t taken it, we won’t allow you to take it and you can’t carry it over.” The worker might reply that some of the leave taken in those 3 weeks was actually contractual leave and not statutory, for example it might be leave carried over from a previous year. These will be tricky issues to handle – most are, when it comes to holiday pay.

The moral of the story?

Rather than waiting and trying to rely on the new carry over provisions, try to agree leave dates with the employer as far in advance of the end of the leave year as possible. If faced with a difficult employer, it might well be best to try to take all of the holiday entitlement before the leave year ends.

For more information or advice contact our employment rights team.