Under regulation 13 of the working time directive employees and workers have a right to carry up to 4 weeks leave from 2020 leave year into the next 2 leave years. This does not apply to the 1.6 weeks under regulation 13A leave, but this can be carried forward one year by agreement between workers and employers.

Why taking holidays has never been so important?

The government’s efforts in amending the rules were intended to provide businesses affected by COVID-19 with the flexibility to better manage their workforce whilst protecting an employee’s right to paid holiday. Although this was welcome news, businesses still need to actively encourage people to use their holidays and have a break.

Many business leaders and their people have been working under immense pressure. Although taking leave (additional leave) at the moment may seem unthinkable as many businesses are struggling to operate or work towards recovery, it’s important that people take time off to re-charge their batteries, avoid burnout or negative impact on performance levels.

Key steps to manage holiday entitlements:

Holiday entitlements should be pro-actively managed so that businesses are not left short-staffed after the pandemic with lots of employees wanting to take holiday at the same time. Employers should still be able to manage requests according to business need.

Monitor individual holiday allowances over the coming months;

Where possible, encourage employees to take their holiday when they can during the current holiday year. Be mindful of the benefits of maintaining good mental health and wellbeing for employees and the importance of timely rest.

If necessary, consider requiring employees to take their holiday at certain times.

Under the Working Time Regulations (WTR) an employer can require an employee to take statutory holiday on specified dates, whether or not the employee is on furlough leave, provided the required notice (as set out in the WTR) has been given. (Your own contractual arrangements may apply to any holiday that you give in excess of the 5.6 weeks). The notice given needs to specify the days leave is required to be taken. The length of notice given must be at least twice the period of leave that the employer wants the employee to take. So, for example, an employer who wants an employee to take five days holiday must give the employee at least 10 days’ notice. A 'relevant agreement' (which can include the contract of employment) may vary or disapply this procedure so check the terms of the contract first.

If you have employees still on furlough, consider how you will approach the issue of holiday. 

Points employers should be aware of:

Best practice would be to allow employees to take holiday to which they are entitled in the new leave year before the “carried holiday” under the new relaxed rules as this “carried holiday” lasts for 2 years.

Any “carried holiday” under the temporary regulations are subject to further protection. For an employer to be able to refuse to allow an employee to take “carried holiday” on particular dates, the employer must have a “good reason”.

Furthermore, there is not statutory requirement to give employees notice that they are able to carry holiday forward if they do not take it, it is best practice for employers to inform employees about the ability to carry forward.

Employers cannot replace “carried leave” with a payment in lieu. If an employee leaves employment however, then an employer must pay the employee for any untaken leave including any “carried leave” under the new relaxed rules along with any leave that the employee has accrued in the current leave year. In some cases, an employer may need to deduct any over payment for holidays taken from current leave year entitlement.

As we start to emerge from restrictions, taking leave will be key to re-energising people as UK small businesses – the backbone of the economy – work to recover and come back stronger.