Annual Leave Carry Over

The Government announced, on 27th March 2020, that workers who have not taken all of their statutory annual leave entitlement in 2020, due to the Coronavirus pandemic, will now be able to carry it over into the next 2 leave years. The legislation applies retrospectively from 26th March 2020.

(updated January 2024) – this legislation has now been repealed from 1st January 2024, and all such leave must be used up by 31st March 2024, or lost.

This means that:

  • The Working Time Regulations 1998 will be amended to allow annual leave to be carried over into 2022, so workers won’t lose their holiday entitlement if they are unable to take all their holiday leave during the rest of 2020, as businesses could be left short-staffed if they did.
  • This is because Employers have an obligation to ensure that workers use their statutory holiday entitlement (20 days) in any one year; which could be very difficult in 2020!
  • This means that Employers can refuse annual leave requests later in the year if there business could not handle many leave requests at the same time.
  • ‘Statutory’ holiday entitlement is the first 4 weeks of leave, so this is the maximum amount that can be carried over by law (unless Employers allow more leave to be carried over, e.g. the full 28 days or any higher contractual entitlement).
  • In the UK all workers are entitled to 28 days holiday, including bank holidays (pro-rata’d if they work part-time or irregular hours).
  • This amendment includes bank holidays, so if they cannot be taken as leave, they can be included in the 4 weeks’ paid holiday that can be carried over.
  • This change applies to all employees (permanent or fixed term, full time or part time) and workers (casuals, zero-hours contracts, agency workers).
  • As before this amendment, employers cannot make a payment to workers for any unused holiday, unless the worker leaves employment.
  • So, from now on, when someone’s employment ends the holiday pay payable to them must include anything carried over from 2020 which was not taken due to the coronavirus
  • Before this amendment the ‘statutory’ holiday of 4 weeks could only be carried over into the next leave year where it could not be taken because of sickness or maternity leave. The additional 1.6 weeks of holiday (adding up to 28 days) could be carried over to the next leave year only if the employer agreed to this.
  • The amendment is called The Working Time (Coronavirus) (Amendment) Regulations 2020.
  • Acas has changed its guidance on holidays to say that holiday can be taken during furlough but, if it is, it must be paid at the full (pre-furlough) pay rate.
  • The Acas Guidance note also say that the new right to carry over 4 weeks’ statutory holiday for two leave years may be used where an individual does not take their leave because they’re self-isolating or too sick to take holiday before the end of their leave year; or where they’ve had to continue working and could not take paid holiday. Individuals also may be able to carry over holiday if they’ve been ‘furloughed’ and cannot reasonably use it in their holiday year. As the last point is so unclear (‘may’?), this guidance may change again!
  • The Government issued Guidance on this on 13th May which you can read here.

You can read our Guide for Employers about Coronavirus here.