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New law around annual leave entitlement and Coronavirus

Bit of background

If employment law was a game of Top Trumps, ‘statute’ trumps ‘contracts’.

What that means is that a piece of legislation will trump a term in a contract of employment.

Many employment contracts will have a clause that states that employees are not allowed to carry over annual leave entitlement. In fact, this might be something that you monitor fairly strictly in your business.

The law on this has now been changed as a result of Coronavirus.

Workers are now able to carry over (some) annual leave for two years

The government has announced it is allowing workers to carry over up to four weeks annual leave into the next two leave years.

The Working Time (Coronavirus) (Amendment) Regulations 2020 has amended regulation 13 of the Working Time Regulations to allow workers to carry over EU holiday into the next two leave years, where it is not reasonably practicable for them to take some, or all, of the holiday they are entitled to due to coronavirus.

The change is aimed at allowing businesses under particular pressure from the impacts of COVID-19 the flexibility to better manage their workforce, while protecting workers’ right to paid holiday.

Pre-booked holidays

If your employee has contacted you saying they no longer need to take the holiday due to their trip / event being cancelled, then you have a few options.

You can tell the employee that they still need to take the time off, you can agree that they rearrange the holiday to another date, or you can allow them to cancel the leave altogether without rearranging.

Employees off sick or self-isolating

If your employees are off work due to sickness / injury or are self-isolating due to Coronavirus and are being paid sick pay, then they will still accrue holidays as normal. Sickness will override any pre-booked holidays, so they will still have those days to take in the future.

Employees on maternity, paternity, or adoption leave

If you have employees who are already on maternity, paternity, or adoption leave, then the rules have not changed. They will still accrue their annual leave.

Furloughed employees

If your employees have been furloughed, then aside from the reduction in their pay to 80%, all other contractual terms remain the same. This means that they still continue to accrue annual leave as they would if they were here.

Bank holidays during a period of furlough

During the period of time an employee is classed as furloughed, bank holidays may occur (we have Good Friday and Easter Monday coming up for example). If this happens, your employee will not be able to have the benefit of the bank holiday. This means that they will accrue it and be able to use it at another time.

On days that are classed as bank holidays, your furloughed employees will still receive the 80% of their normal wage.

Reduced hours

If you have agreed with your employees that they will reduce their hours during this period of time, then their holiday entitlement will also be reduced to reflect this change. Their holidays will only be pro-rated for the period of time that they are working less hours.

Working from home

Some employees can do their job no matter where they are. These employees, while being at home, are still working.

What this means in practice is that they can still take holidays as they would if they were in work.

They will need to take these holidays so that you comply with the Working Time Regulations and they have sufficient rest.

Can I ask employees to take holidays?

Short answer is yes. You can require your employees to take holidays at specific times. If you want someone to take holidays, then you need to give them the appropriate notice. The notice is double the length of the holiday you want them to take i.e. 2 days’ notice for 1 day, 4 days’ notice for 2 days, 6 days’ notice for 3 days, and so on.

Carrying over holidays

During the Coronavirus outbreak, it may not be possible for your employees to take all of their annual leave by the end of your leave year. As these are not normal circumstances, the government has introduced a temporary law to deal with this.

If your employees or workers cannot use all of their holiday because of the Coronavirus, then they will be allowed to carry over up to 4 weeks’ paid holiday over a two year period.  You can allow the carry over of holidays if:

  • Employees are self-isolating or are too sick to take holidays before the end of the leave year;
  • They’ve been temporarily sent home as there’s no work (this could be that they’ve been laid off or classed as furloughed); or
  • They’ve had to continue to work and were not in a position to take holiday because of the needs of the business (e.g key workers).

Contractual terms

Some employers have a clause in their contract that stops employees from carrying over unused holidays into the next leave year. Under normal circumstances, these rules would apply. But at the moment, things are far from normal for everyone.

Being sensible and having a discussion with your employees and workers about holiday entitlement will help. You can agree with them when they take their leave, so that it’s suitable for the business and doesn’t leave you with no staff. You can also agree with them that they use a certain number of holidays before the end of the leave year and confirm how many days they can carry over.

Should I put this in writing?

We would advise that you do. It doesn’t have to be written in legal terms, just a brief letter that confirms what was discussed and agreed. Get your employee to sign a copy to confirm that they have understood and agree.

More information

There will be daily updates on the NHS 111 online service and the Government website

You can also find more on sickness absence here

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