In the UK, employees are entitled to 5.6 weeks (28 days) of statutory annual leave each year for someone working 5 days a week (pro rata for part-time staff). The entitlement can include bank and public holidays and applies to all types of employees and workers except those who are genuinely self-employed.
In this article, we look at the circumstances where employees may not be able to take all their annual leave entitlement within the holiday year and whether they have a legal entitlement to carry any untaken leave into the next holiday year.
What Legislation Covers Annual Leave Entitlement In The UK?
We know who is entitled to annual leave, but most employers are unaware of where this entitlement comes from.
The right to take annual leave in the UK comes from the Working Time Regulations 1998 and is made up of two parts:
- A basic 4-week (20-day entitlement): this portion of annual leave is derived from European law and is sometimes referred to as ‘euro leave’.
- An additional entitlement of 1.6 weeks is derived from UK domestic law.
The distinctions above are relevant when determining when annual leave can be carried over.
When can you carry over annual leave to the next holiday year?
It depends on why someone has untaken annual leave within that holiday year, whether the employer must allow them to carry some or all of their leave, and how long they have to take it.
Where an employee has been unable to take their annual leave due to sickness, usually in the event of long-term illness, their basic holiday entitlement (4 weeks/20 days) will be carried forward into the next annual leave year. It should be taken within 18 months of the end of the annual leave year in which the leave accrued.
- Statutory ‘Family’ Leave
This includes maternity leave, adoption leave, shared parental leave, parental leave, paternity leave, and parental bereavement leave.
Under these circumstances, the statutory 28-day annual leave should be carried over into the next holiday year.
Please note: A payment in lieu of accrued statutory annual leave is not permitted unless the employee is leaving their employment.
- Employer Fault
The employer has a duty to not only recognise the right of their workforce to take paid annual leave and receive paid basic holiday entitlement, but the employer must also give their staff a reasonable opportunity to take their annual leave and encourage them to do so.
Where the employer fails in any of these regards, the employee can carry over their basic 4 weeks of annual leave into the next annual leave year.
The best way to avoid this problem is to ensure that this scenario does not occur in the first place, as per the ‘tips’ section at the end of this article.
What has happened to the rules allowing the carryover of annual leave due to the COVID-19 pandemic?
The Working Time (Coronavirus) (Amendment) Regulations 2020 amended the Working Time Regulations 1998 to create an exemption relating specifically to COVID-19.
It stated that where it was not reasonably practicable for someone to take some or all of the holiday to which they are entitled due to the coronavirus, they had a right to carry the 4 weeks of basic annual leave entitlement across into the following two annual leave years.
From January 1, 2024, these regulations will no longer apply. Any annual leave accrued due to COVID-19 that is still owing to an employee after January 1, 2024, should be taken before March 31, 2024.
How do I know which leave is basic and which is additional? The contracts of employment state an annual leave entitlement of 5.6 weeks.
Most employment contracts do not distinguish between basic and additional types of annual leave entitlement, not least because this will be very confusing but because the overall statutory holiday entitlement is 28 days/5.6 weeks. This distinction is usually only relevant when weighing whether annual leave should be carried over or not.
Employers who provide an annual leave entitlement over and above 5.6 weeks often place limits on the amount of leave that can be carried over into the next holiday year or state that in the event of certain types of dismissal, e.g., for gross misconduct, the employee will only receive payment in respect of untaken statutory annual leave.
When considering whether you should allow an employee to carry over all or some of their basic holiday entitlement, employers should always seek Avensure’s advice so that we may be able to check the contracts and any other relevant agreements.
How can an employer be at fault for not accommodating annual leave when the annual leave entitlement is set out in the contract of employment?
Employers often think that setting out the annual leave entitlement in the contract of employment is sufficient, and if an employee doesn’t book it, they lose it. There is a certain amount of responsibility on employees to book their leave, and of course, if they fail to do so without good reason, they will certainly ‘lose it’.
3 Top Tips To Avoid Messy Annual Leave Carry-Over Headaches:
- REMINDERS: Write to staff throughout the year to remind them they must book their leave, or it will be lost. Telling them that any untaken annual leave will be lost is very important, as is informing them that their right to pay for such a holiday will also not apply. If sending reminders by email concerning statutory holiday entitlement, keep a copy of the email and add ‘read receipts. If issuing reminders in staff meetings, take meeting minutes, show who was there, and ensure those not in attendance are given copies of the minutes.
- Avoid unreasonable notice periods for booking annual leave or heavily restricting the number of staff allowed off at any one time. For example, it is unreasonable to insist someone give one month’s notice to book one day off. Likewise, if you are too restrictive on the number of staff you allow off, you will end up in a situation where your staff cannot take all their leave in the annual leave year.
- Ensure that all staff are aware of the rules regarding booking and authorising annual leave and that managers apply them fairly and reasonably.
As always, this article is a guide and not a substitute for taking advice; please contact Avensure about any of your holiday queries. Click here: Avensure Contact!