COVID-19: More flexible rules for annual leave

On 27 March 2020, the Government introduced new regulations which will allow employees to carry forward most of the leave to which they entitled, but are unable to take because of COVID-19, into the next two leave years.

According to the announcement, the measures are designed to support Britain’s key industries such as food and healthcare. In fact, the provisions are widely drafted and will apply to any employer where it was not reasonably practicable for a worker to take some or all of the leave to which they were entitled because of the effects of COVID-19.

The measures are needed because any worker protected by the Working Time Regulations is not generally able to carry forward leave from one leave year to the next. Under the regulations, all workers are entitled to 28 days of leave in their leave year. The 28 days is calculated as minimum leave period of four weeks leave (based on a five day working week) plus eight further days (normally corresponding to the eight annual UK bank holidays). The leave year itself can run for any year-long period stipulated in the worker’s contract – for example 1 January to 31 December. The minimum four-week period cannot generally be carried forward, while the eight-day period can, if the employer and employee agree, be carried forward one year only. Anything that cannot be carried forward is (in normal circumstances) lost, to the detriment of the employee.

At the same time, employers have an obligation to ensure that their workers take their statutory entitlement in any one year. If this does not happen, then the employer could suffer a financial penalty.

Under the new regulations, up to four weeks of unused leave can be carried forward into the next two leave years. The provisions for the carry forward of the additional eight days by one year only will remain unchanged.