Changes to entitlement to carry over annual leave

It has recently been announced that in light of the coronavirus pandemic there will be changes to workers’ entitlement to carry over annual leave. The aim of these changes is primarily to support employers and workers performing key work, such as in hospitals and supermarkets, during the pandemic.

Full time workers are entitled to 4 weeks’ holiday each year under Regulation 13 of the Working Time Regulations 1998 and an additional 1.6 weeks under Regulation 13A. The 4 weeks’ entitlement under Regulation 13 cannot be carried over to the next leave year. There is an obligation on employers to ensure that workers have an adequate opportunity to take their entitlement, but if a worker does not take their entitlement they lose it. Annual leave cannot be replaced with payment in lieu unless the worker’s employment is terminated.

The new changes come into force by way of the Working Time (Coronavirus) (Amendment) Regulations 2020. They amend Regulation 13, which now states that where it is not reasonably practicable for a worker to take some or all of their 4 weeks’ holiday entitlement as a result of the effects of coronavirus (including on the worker, the employer or the wider economy or society), they are allowed to carry over 4 weeks into the next two leave years.

The effect of this is that employers will have more flexibility in managing their workforce in situations where granting holiday would have left them understaffed. It also means that workers can continue to work during the pandemic without losing their holiday entitlement.

For the purpose of calculating holiday entitlement, a leave year is that which is agreed in writing between the employer and worker. This is usually set out in the worker’s contract and most employers use the calendar year. Where there is no agreement the default position is that the leave year begins on the date the worker’s employment started.

If a worker subsequently leaves their employment, the employer must make a payment in lieu for any untaken but carried over holiday in accordance with Regulations 14 and 16. Therefore an employer’s liability for untaken holiday will extend into the next two leave years as well.

Anna is a member of our Employment Team. If you would like to instruct her, please contact the Employment clerks on or 0117 921 1966.