UK Employers: How To Approach Annual Leave

• Published date: 09 June 2020
• Author: Mr Edward Smith
• Subject Matter: Employment and HR, Coronavirus (COVID-19), Contract of Employment, Employee Benefits & Compensation, Government Measures, Employment and Workforce Wellbeing
• Law Firm: Vistra

Annual leave has quickly become a prevalent topic for UK employers. It is an area of employment law that can be complex even in less challenging circumstances, particularly for overseas employers with a small number of UK employees.

In these times of social distancing and global travel restrictions, it is currently less likely that employees will have a desire to take a holiday, particularly where they are furloughed and not working anyway.

This poses a potential long-term issue for UK employers around accrued but untaken leave. It also raises questions on holiday carry-over, the effect of taking a holiday while on furlough leave, whether employers still have the right to specify dates on which employees may, or may not, take a holiday, and more.

The legal position

Under the Working Time Regulations 1998, UK employees have a statutory right to a minimum of 5.6 weeks' paid annual leave. Employers and employees can agree on an enhanced entitlement if they wish - but cannot agree below the 5.6 week minimum.

The Employment Rights Act 1996 provides that an employee's holiday entitlement should be set out in their initial statement of employment particulars, which is usually their employment contract.

Holiday carry-over and accrual

UK employees must take a minimum of 4 weeks' annual leave within their employer's holiday year unless they are prevented from doing so. For example, in a case of long-term sickness, in which case they may be able to carry over some or all of this entitlement to the next holiday year.

On the other hand, some or all of an employee's additional 1.6 week entitlement can be carried over into the following holiday year even where it was possible for the employee to take this in the current year, provided this is agreed with the employer.

In March 2020, the Working Time (Coronavirus) (Amendment) Regulations 2020 (the "WT 2020 Regulations") were introduced, which, in some cases, extend an employee's right to carry over the untaken holiday. Employees may now carry over potentially all of their untaken holidays into the next two holiday years where, as a result of the current pandemic, it has not been 'reasonably practicable' for them to take this.

To answer the question of reasonable practicability, employers will need to consider a range of factors, including the following:

• The Worker. For example, employers should consider an individual's health, whether they are furloughed the length of time remaining in the holiday year and whether it is...