New regulations came into force on 26 March 2020 relaxing the rules which govern when annual leave can be carried over. The effect of the regulations is that workers who have not taken their statutory four weeks’ annual leave entitlement due to coronavirus (COVID-19) can now carry it over into the next two leave years.

Workers have a statutory right to 5.6 weeks’ annual leave, which includes bank holidays. This is made up of a four-week entitlement under Regulation 13 of the Working Time Regulations (WTR) which normally could not be carried over into the next leave year and an additional 1.6 weeks under Regulation 13A which can be carried over if there is a written agreement allowing for that, such as a collective agreement. The only exception to the rule about not being able to carry over the four-week entitlement of leave was in relation to workers who were off sick or on maternity leave and therefore were unable to take it.

Regulation 3 of the Working Time (Coronavirus) (Amendment) Regulations 2020 now provides an exception to the bar on carrying forward any of the four weeks’ statutory annual leave.

This means that the WTR are amended so that where, at the end of a leave year, it was not “reasonably practicable” for the worker to take some or all of the statutory four weeks’ leave because of the effects of coronavirus (COVID-19), it can be carried forward into the following two leave years. The new exception applies to most workers including agency workers as well as those on irregular contracts such as zero-hour arrangements.

The regulations ensure that those workers whose leave year expired at the end of March and who have been unable to take holiday due to coronavirus (COVID-19) do not lose that holiday. The circumstances where the exception would apply are likely to be fairly wide and not just restricted to those who are sick and/or self-isolating given that it applies as a result of “the effects of coronavirus (including on the worker, the employer and the wider economy)”. 

The ACAS guide suggests that this will apply to both the situation where a worker is furloughed as well as workers unable to take the leave because of working commitments. This would apply to those deployed in the NHS and others in the private sector, such as delivery drivers who are working round the clock and have been unable to take leave.

Regulation 15 of the WTR normally allows employers to refuse requests to take annual leave, provided they give notice equal to the amount of leave to be taken (e.g. one week’s notice for one week’s leave). However, this provision is amended by the regulations so that employers can only refuse leave to be carried over due to coronavirus (COVID-19) where it has “good reason to do so”. What will be a good reason is likely to depend on all the circumstances, but employers will need to clearly explain the reason and would be well advised to evidence that in writing.

Changes have also been made to Regulation 14 of the WTR which provides for a payment in lieu of any untaken annual leave in the event that a worker’s employment terminates. The amendment now provides for the payment in lieu of any leave untaken on the date of termination to include any that is carried forward because of the effects of coronavirus (COVID-19).

Articles shared by Thompsons relating to coronavirus (COVID-19) are correct at the time of publication. You should check the government's guidelines for the latest information and advice at https://www.gov.uk/coronavirus.