Carrying over of Annual Leave

We are regularly asked by customers regarding annual leave and the rules and legislation surrounding carrying over annual leave into the next 12 month leave period.

During the Covid-19 Pandemic, the government agreed to temporary rules which allowed workers to accrue annual leave for up to two years when they were unable to take the leave for various Covid related reasons, such as furlough leave.

Effective from the 1st January 2024 this law no longer applies and annual leave carried over due to COVID must be used by the 31st March 2024.

If employers are giving employees the statutory annual leave of 28 days (5.6 weeks), they should be taking this within the holiday year, unless there is a ‘workforce agreement’ that allows such as an agreement with a trade union.

Employees who are on maternity leave must have annual leave carried over into the next leave year and if they are on long term sick leave, they can carry over a maximum of 4 weeks holiday entitlement and it must be used within 18 months of the date it was carried over from.

Employers may be in a position that employees cannot take their annual due to a variety of business and personal circumstances. This could include seasonal working patterns where staffing levels need to be at maximum capacity or where the employee has been keen to finish a project or particular piece of work and have been reticent to take the time off.

Annual leave should be encouraged, it ensures the wellbeing of employees, however companies can use their discretion as to when employees should take annual leave, particularly if this causes business related issues, staff shortages etc.

If there has been a specific reason that the employees haven’t been able to take their annual leave and employers are looking to do this as a one-off discretionary move, they need to ensure that the carryover is no more than 8 days, and this should be used as soon as possible in the next leave year.  Employers can enforce any holiday be taken and as long as they give the appropriate notice of 8 days before the end of the annual leave year.

Employers should not be paying employees for unused annual leave unless in the event of resignation or termination of employment.

If an employee is struggling to take annual leave due to workload and similar pressures, they need to be having discussions with their line manager as taking annual leave in that year is a statutory right.

If a company gives employees more than the statutory annual leave amount, it should be a discretionary decision how much annual leave can be carried over and they should have clear and robust contracts of employment which dictate this.

At THSP, we are happy to support and provide guidance to company’s regarding this or any other HR or Employment Law issue you are facing.

Get in touch with our HR and Employment Law team