Annual leave and coronavirus

The impact of COVID-19 may mean it is difficult for workers to take all their statutory annual leave entitlement because, for example, demand at work means that taking annual leave is not feasible. The Government has amended the Working Time Regulations 1998 to give workers the statutory right to carry over 4 weeks of annual leave into the next two leave years.

A worker will be entitled to carry leave over when it hasn't practicable for annual leave to be taken in the leave year to which it relates as a result of the effects of coronavirus. This means that there is no automatic right to carry leave over and employers will need to consider the “reasonably practicable” element. For assistance, Government guidance was produced on 13 May 2020 which sets out that employers should take account of various factors when considering whether it was not reasonably practicable for an employee to take leave:

• whether the organisation has faced a significant increase in demand due to coronavirus that would reasonably require the worker to continue to be at work and cannot be met through alternative practical measures
• the extent to which the organisation’s workforce is disrupted by the coronavirus and the practical options available to the business to provide temporary cover of essential activities
• the health of the worker and how soon they need to take a period of rest and relaxation
• the length of time remaining in the worker’s leave year, to enable the worker to take holiday at a later date within the leave year
• the extent to which the worker taking leave would impact on wider society’s response to, and recovery from, the coronavirus situation
• the ability of the remainder of the available workforce to provide cover for the worker going on leave

The guidance also states that it would not be reasonably practicable for a worker to take annual leave whilst on furlough if the employer was not able to meet the requirement to pay normal pay.

Employers should do everything reasonably practicable to ensure that the worker is able to take as much of their leave as possible in the year to which it relates, and where leave is carried forward, it is best practice to give workers the opportunity to take holiday at the earliest practicable opportunity.

Where leave is carried over, employers will only be able to reject a request to take carried over leave where they have ‘good reason’ to. No further definition or examples of what will or will not be deemed good reason have been given.

The guidance states that it is not likely that furloughed workers will need to carry leave over because of the ability to take annual leave during furlough. One exception would be where the employer was unable to fund the ‘top up’ from 80% pay to normal pay. Annual leave must be paid at normal pay when on furlough.

There is no requirement for employers to give workers notice of their right to carry leave over, however, it may be useful to inform workers, where appropriate, how much of their leave is to be carried over and how.

As stated above, the new entitlement to carry over only applies to Regulation 13 leave (4 weeks) and not Regulation 13 leave (1.6 weeks). Regulation 13A leave can already be carried over to the following leave year where there is a relevant agreement to this effect. Where there is no relevant agreement, meaning that employers do not allow any of the statutory minimum annual leave to be carried over, employers will have to allow the Regulation 13A leave to taken in the leave year to which is relates otherwise they run the risk of breaching the Working Time Regulations.

To provide more flexibility, employers without a relevant agreement in place to permit the carry-over of Regulation 13A leave, should consider implementing one, especially where circumstances mean that workers will not be able to take their full annual leave in the current leave year. This will then mean that all remaining statutory minimum annual leave can be carried over and the employer will not run the risk of failing to provide 5.6 weeks of annual leave. A relevant agreement for this purpose is a written agreement between employer and worker.

Where leave is carried over the worker will be entitled, in that leave year, to take the carried over leave in addition to leave which is accrued during that leave year. Where a substantial amount of leave is to be carried over, employers may consider putting in place arrangements for splitting the leave between the two subsequent leave years.

Carry over of contractual leave, in excess of the statutory minimum, is down to agreement between employer and worker.

Annual leave and furlough

Annual leave continues to accrue as normal during a period of furlough. Employees are able to take annual leave during a period of furlough and employers may requires employees to take annual leave but should first consider whether the aim of annual leave i.e. a time for enjoyment, is met. Employees should be paid normal pay for annual leave during furlough meaning that employers need to top up the wage costs recovered from the Job Retention Scheme. If employees are flexibly furloughed, any hours taken as holiday during the claim period should be counted as furloughed hours rather than working hours, even when they fall into a period when the employee would have been working under the part-time arrangement.