The Covid-19 restrictions are causing employers various issues arising from employees’ holiday entitlement.

An employee is entitled to a minimum of 28 days (5.6 weeks) holiday each year, which can include the 8 Bank Holiday days in the UK.  Their contract of employment may give them more, but for a full-time employee, they cannot have less.  Part-time employees have a pro-rata holiday entitlement.

There is no automatic right to carry over holiday from one holiday year to another.  Many employers have a holiday year running from 1 January to 31 December, but this can vary.  The contract of employment may allow untaken holiday to be carried over from one year to the next, and some will allow this but limit the number of days.  Alternatively, there may be no right in the contract, but the employer and employee may have agreed in one particular year that the employee may carry some holiday over to the next year.  If there is no contractual right, or no agreement, then any holiday not used in a holiday year is lost. 

With the limitations on travel and general leisure activities many employees wish to carry over their unused holiday to take at a later date.  Whilst this is understandable, it does cause a potential problem for employers who are likely to be faced with employees booking holidays at the same time, and having more holiday to book, when the employer is trying to increase business and service clients, perhaps in order to stay in business.

If an employer and employee have not agreed a carry-over of unused holiday from the last holiday year and there is no contractual right, the employer can treat that as lost holiday.  If holiday has been carried over, employers should encourage employees to take such holiday as early as possible in the holiday year, to avoid a glut of holiday requests at the same time.

As a practical step, employers should start asking staff to put in their holiday requests as soon as possible so that the employer can manage holiday periods better.

Employees may not wish to do this in view of the current uncertainty as to when they will be able to travel.  If this is proving difficult for the business, employers can require employees to take holiday at a time of the employer’s choosing.  The employer must give at least twice the amount of notice as the holiday period they require the employee to take.  If the employer wants the employee to take a week’s holiday, the employer needs to give the employee at least two weeks’ notice of the requirement.  The employer can give more, but not less.  Also, the request should be put in writing.

Obviously, getting agreement on holiday arrangements is preferable to forcing staff to take holiday, but this is an option open to employers if necessary.

Employees may argue that the law has changed and they can carry over holiday for 2 years.  This is not exactly right.  The Government did introduce the right to carry up to 4 weeks’ holiday over 2 years where it was not “reasonably practicable” to take holiday.  This was principally aimed at essential workers who have been asked not to take holiday because they are needed to carry out essential roles, such as front line health care roles, and their employer does not want them to take holiday.  Accordingly, if the employer is willing for an employee to take holiday, this means it is reasonably practicable and the 2 year extension does not apply.

The right to holiday will continue to accrue while someone is on furlough, so employees should be taking their annual leave when on furlough.  They are entitled to be paid their holiday pay at the normal rate of pay, not furlough rate. If for some reason it is not reasonably practicable for them to take their holiday whilst on furlough, which seems unlikely based on the comments above, they can accrue that holiday and carry forward.   If someone is on sick leave, their holiday accrues during their sick leave (unless they want to take it) and can be taken when they return to work, and this holiday can be carried over to the next holiday year if it cannot be taken in the year of the sickness.

The minimum holiday entitlement of 28 days per annum introduced by the Working Time Regulations arises from the health and safety perspective, that people need rest periods for their health.  Accordingly, it is not unreasonable for an employer to ask its employees to take their holiday – it is an imperative introduced by these Regulations.  In these times of stress, it is clearly important for people to have some downtime.