How to Manage Holiday Carry Over in the UK

On commencement of employment, an employee builds up or accrues holiday entitlement. Employment law entitles an employee to a minimum of 5.6 week’s leave.

They can take this leave in one particular leave year, which is a 12-month period as set by an employer. Whilst businesses can choose the 12 months that make up a leave year, popular periods are between January and December, or from April to March to match the tax year.

That said, someone will inevitably ask questions about employees carrying holiday over into the next year.

This can be quite a complicated area, so let’s look at what the law says on carrying over holiday entitlement and what is best for your business.

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Can holidays be carried over?

How staff are provided holidays in the UK is outlined below:

• Four weeks in line with EU law
• 6 weeks in line with UK law
• Any additional leave the employer wishes to provide

Usually, there's no statutory obligation on an employer to allow an employee to carry leave over to the following year, though this may not be the case where the employee has been on long term sick leave or maternity leave.

Leave may only be carried over if the employer gives the employee permission or if it's stated in the employment contract and/or staff handbook.

Employment law and holiday carry over rules

Employers must ensure that workers and employees have the opportunity to take their full 5.6 weeks’ worth of statutory entitlement in one leave year and must not have holiday days carried over for four weeks.

Employees can carry over the remaining 1.6 weeks, subject to agreement from the employer, as can any additional contractual leave.

As staff should be paid for their holidays, the answer to can holiday pay be carried over is yes.

This changes, however, in several circumstances.

Holiday carry over when sick

When considering carrying over holiday to next year because of sickness, this is a subject that European courts have assessed.

They ruled that the four weeks as prescribed by EU law could be permitted to be carried over if staff could not take them because of being sick.

The Employment Appeal Tribunal has clarified that you should permit this for up to 18 months after the leave year in question.

Carrying over holiday after maternity leave

As staff can take up to 52 weeks of maternity leave and continue to accrue their holidays in this time, employers may also wonder can holiday entitlement be carried over after this leave? The short answer is yes it can.

Whilst the law is not overly clear on this, it is highly advisable to let staff carry over the full amount of statutory leave they could not take because of being on maternity leave. If they take a full 52 weeks of leave, this will be 5.6 weeks.

Whilst the prospect of carrying holiday over maternity leave can make employers nervous, there are ways they can approach this.

For example, as statutory maternity pay ends at 39 weeks, but maternity leave can continue for another 13 weeks, maybe the staff could end their maternity leave at this point and instead take some of their annual leave.

In this way, they will remain off work but receive payment in full, and therefore have less leave left to take at a later date.

Carrying over holidays in the UK because of the coronavirus pandemic

Employment law states that a worker may carry up to four weeks of leave over in this way where it has not reasonably practicable for annual leave to be taken in the leave year to which it relates because of the effects of coronavirus (including on the worker, the employer or the wider economy or society).

This means that there is no automatic right to carry leave over and employers will need to consider the “reasonably practicable” element.

For help, the government produced guidance on 13 May 2020, which sets out that employers should consider various factors when considering whether it was not reasonably practicable for an employee to take leave:

• Whether the business has faced a significant increase in demand because of coronavirus that would reasonably require the worker to continue to be at work and cannot be met through alternative practical measures
• If they are/were furloughed workers and couldn’t reasonably take statutory annual leave
• The extent to which the coronavirus and the practical options available to the business to provide a temporary cover of essential activities disrupted the business’ workforce
• The health of the worker and how soon they need to take a period of rest and relaxation
• The 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 affect the wider society’s response to, and recovery from, the coronavirus situation
• The ability of the rest of the workforce to provide cover for the worker going on leave.

It should be noted that this relates to the four weeks of leave as prescribed by EU law. The remaining periods of leave can also be carried over as normal, subject to employer agreement.

Expert support on leave and absences with Peninsula

Employers have a responsibility to encourage staff to take their full leave entitlement each year. With difficulties or sickness arising in the year, it can be hard for employees to do this. This leaves you unsure about your rights as an employer.

With free practical advice, we can make sure you make the most informed decision. Our services help treat employees with respect, without fear of evoking employment tribunals.

For information about our contracts and documentation advice, drafting and consultancy service, please visit our business service page. You can also call us on: 0800 028 2420.