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With restrictions easing and borders beginning to open up for overseas travel you may be facing annual leave headaches with staff having built up substantial annual leave entitlement and many will want to take their entitlement at the same peak times such as the August School holidays or at Christmas in the second half of the calendar year.

We set out below some points to consider with how to deal with these conflicting requests:

1. Carrying annual leave into future leave years

The 5.6 weeks of statutory holiday is split into 4 weeks and 1.6 weeks, and there are some differences in the rules that apply:

  • the 1.6 weeks can be carried forward into the following leave year if a written agreement exists between the worker and the employer;
  • generally, the 4 weeks cannot be carried into future leave years, so employers must facilitate these weeks being taken within the relevant leave year.

The Working Time (Coronavirus) (Amendment) Regulations 2020

The government passed the above emergency legislation during the pandemic (27 March 2020) to ensure businesses have the flexibility they need to respond to the coronavirus pandemic and to protect workers from losing their statutory holiday entitlement. These regulations enable workers to carry holiday forward where the impact of coronavirus means that it has not been ‘reasonably practicable’ to take it in the leave year to which it relates.

Where it has not been ‘reasonably practicable’ for the worker to take some or all of the 4 weeks’ holiday due to the effects of coronavirus, the untaken amount may be carried forward into the following 2 leave years. When calculating how much holiday a worker can carry forwards, employers must give workers the opportunity to take any leave that they cannot carry forward before the end of the leave year.

What is reasonably practicable?

When considering whether it was not reasonably practicable for a worker to take leave as a result of the coronavirus, so that they may carry untaken holiday into future leave years, an employer should consider various factors, such as:

  • whether the business has faced a significant increase in demand due to coronavirus that would reasonably require the worker to continue to be at work and cannot be met through alternative practical measures
  • the extent to which the business’ workforce is disrupted by the coronavirus and the practical options available to the business to provide temporary cover of essential activities
  • the health of the worker and how soon they need to take a period of rest and relaxation
  • the length of time remaining in the worker’s leave year, to enable the worker to take holiday at a later date within the leave year
  • the extent to which the worker taking leave would impact on wider society’s response to, and recovery from, the coronavirus situation
  • the ability of the remainder of the available workforce to provide cover for the worker going on leave

You should do everything reasonably practicable to ensure that the worker is able to take as much of their leave as possible in the year to which it relates, and where leave is carried forward, it is best practice to give workers the opportunity to take holiday at the earliest practicable opportunity.

2. Carried leave cannot be paid in lieu

If your workers are permitted to carry over leave you must facilitate them taking it. Carried leave as set out in point 1 above is still subject to payment in lieu rules. Unless a worker’s appointment has ended then you cannot replace the taking of holiday with a financial payment instead (i.e. payment in lieu).

3. Requiring a worker to take annual leave

If you require a worker to take holiday then you need to give them twice as much notice as the length of the actual length of the holiday. By way of example, the default position is that you would need to give a worker 10 days’ notice if you required them to take 5 days’ holiday unless their contract says otherwise.

4. Cancelling a worker’s holiday

You can cancel a worker’s holiday by giving the worker the same amount of notice as the length of holiday the worker intended to take. By way of example, the default position is that you would need to give a worker 5 days’ notice if you intended to cancel their 5 days’ holiday unless their contract says otherwise.


Current government guidance regarding holiday pay during Covid-19 can be read here

The topics covered in this update are complex and are provided for general guidance only. Therefore, if any of the circumstances mentioned in this update have application to individual situations you will need to take specific legal advice.

The information in this update is correct as of 25 May 2021 and should be read alongside the government’s specific guidance.

We hope you have found this update useful and if you do have any queries please get in touch.

Marie Walsh

Director, Employment Solicitor and Mediator

Direct Dial 0113 8874670

Mobile 07736252681

Reception: 0113 3229222 

Address: 4 Park Place, Leeds LS1 2RU

Victoria Horner

Senior Associate

Direct Dial: 01138874673

Andy Boyde

Employment Solicitor

Direct Dial: 0113 323 0346

Mobile: 07595 520 508