Government announcement on holiday leave for workers – what do employers need to know?

Alan Price, HR expert and CEO at BrightHR, shares the changes to annual leave rules in the light of coronavirus

Recently, the government announced that workers who have not taken all of their statutory annual leave entitlement due to Covid-19 will now be able to carry it over into the next two leave years.

This announcement is in recognition of the inevitable issues faced by employers in employees taking holiday before the end of the leave year. This may be because:

  • they’re self-isolating or are too sick to take holiday before the end of their leave year
  • they’ve been temporarily sent home as there’s no work (‘laid off’ or ‘put on furlough’)
  • they’ve had to continue working and could not take paid holiday

The Regulations now give workers a statutory right to carry leave over into the next two leave years after this one. This only applies to the first four weeks of leave under the Regulations (Regulation 13 leave). The other 1.6 weeks of statutory minimum leave is already capable of being carried over to the next leave year with agreement from the employer, and the new laws do not change this. This means that all statutory minimum annual leave accrued in this leave year is now capable of being carried over, in the following way:

  • Four weeks (legal entitlement to be carried over to next two leave years)
  • 1.6 weeks (employers can agree that this be carried over to the next leave year)
  • Enhanced contractual entitlement (at employers’ discretion)

The rules on pay in lieu of untaken annual leave have also been amended. This means when employment terminates, the holiday pay payable will include anything carried over and not taken due to the coronavirus carry over. The law still does not allow pay instead of statutory minimum entitlement at any time other than termination of employment.

If employers do not already have a policy in place to deal with the carryover of the additional 1.6 weeks of leave, it would be advisable to prepare one now so that everyone is aware of precisely what this means for them in terms of leave. Likewise, this should be done for any contractual entitlement over the statutory minimum amount. Many employers already offer a buy back system of this element of entitlement.