What’s the latest on annual leave carry over rights?
Legislative change
The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 came into force on 1 January 2024. They amended the Working Time Regulations 1998 (WTR) to preserve entitlements established by EU case law for workers to carry over their accrued but unused paid annual leave entitlement in certain circumstances.
Sick leave
The WTR now provide that where, as a result of taking sick leave in any holiday year, a worker is unable to take some or all of the annual leave to which they’re entitled in that holiday year, they can carry over that untaken leave into the following holiday year, provided they then take it within 18 months of the end of the original holiday year.
For regular hours workers, this only applies to up to four weeks’ annual leave in regulation 13 WTR , not the additional 1.6 weeks in regulation 13A WTR which together make up the 5.6 weeks’ statutory annual leave entitlement. The additional 1.6 weeks (and any extra untaken contractual annual leave) can only be carried over to the following holiday year if the worker has a contractual right to do so, or you agree with them that they can.
Maternity and family-related leave
The WTR also now explicitly say that where, due to taking statutory leave in any holiday year, a worker is unable to take some or all of the annual leave to which they’re entitled in that holiday year, they can carry over that untaken leave into the following holiday year only. This applies to up to the full 5.6 weeks’ statutory annual leave entitlement, not just the four weeks.
Statutory leave here covers maternity, adoption, shared parental, unpaid parental, paternity and parental bereavement leave.
Tip. Encourage those who are going on maternity or other family-related leave to take any accrued annual leave before their time off begins. This should help to limit how much they can carry over on their return, particularly if their time off straddles two holiday years.
Other circumstances
Finally, workers can carry over up to four weeks’ annual leave if you:
- haven’t recognised their right to annual leave or to payment for that leave, e.g. you’ve wrongly classed them as a self-employed contractor
- haven’t given them a reasonable opportunity to take annual leave, or have failed to encourage them to do so; or
- haven’t informed them that any annual leave not taken by the end of the holiday year, which can’t be carried over, will be lost.
In these situations, the leave can be carried over up to the end of the first full holiday year in which none of the above apply.
Tip. To deal with the second two bullet points, issue a reminder to your workers sufficiently in advance of the end of your holiday year (see The next step ). Ensure also that your holidays policy clarifies the carry-over position.
For a reminder to take holiday letter, visit https://www.tips-and-advice.co.uk , Download Zone, year 26, issue 3.