Carry Over of Annual leave – Government Relaxes Rules

The rules in relation to the carry over of annual leave have been temporarily relaxed to deal with the coronavirus disruption.

The Government has announced that employees and workers who are unable to take their annual leave due to coronavirus may carry over up to four weeks’ paid holiday into the next two leave years.

The Working Time (Coronavirus) (Amendment) Regulations 2020 will amend the Working Time Regulations 1998 to create an exemption relating specifically to the coronavirus outbreak.

Employees may be unable to take their annual leave for a number of reasons, including:

• they are working in key sectors and due to work demands cannot take annual leave,
• they are self-isolating or are too sick to take holidays before the end of their leave year,
• they have been temporarily sent home, placed on layoff or furlough leave.

If an individual leaves their job, either by resigning or due to dismissal during the two-year period, any untaken paid holiday must be added to their final pay. The government has stressed that employers should ensure in so far as possible that workers have adequate opportunity to take their holidays. An individual should not be paid in lieu for holidays unless they are leaving.

The change will apply to most workers including agency workers and those on zero-hours workers.

The temporary change relates only to 4 weeks leave. Employers who do not currently have a policy on the carry over of leave, may decide whether they will allow for extra holidays to be carried over. Extra holidays may include;

• the remaining 1.6 weeks of statutory leave,
• any contractual holiday entitlement above the legal minimum.