COVID-19: The impact on your annual leave

23rd April 2020

The Working Time Regulations 1998 (“WTR”) have been amended to allow the carry-over of untaken leave where the leave cannot be taken due to COVID-19.

The Working Time Regulations 1998 (“WTR”) have been amended to allow the carry-over of untaken leave where the leave cannot be taken due to COVID-19. This leave can be carried over into the next two leave years following the leave year in respect of which it was due to be taken. These changes have been implemented as a result of the Working Time (Coronavirus) (Amendment) Regulations 2020 (“Amendment Regulations”) with immediate effect.

However, this only applies to the four weeks of annual leave provided under Regulation 13 WTR, not the additional 1.6 weeks provided for under Regulation 13A, or any additional leave provided under the contract of employment (although you can allow this if you wish).

How is this different from the previous position?

Regulation 13(9) WTR stipulates that the four weeks of leave provided for under the Working Time Directive can only be taken within the leave year in which it accrues.

However, a new Regulation 13(10) has been inserted into the WTR which stipulates that where it is not ”reasonably practicable’ for a worker to take some or all of the leave to which the worker was entitled under this regulation as a result of the effects of coronavirus (including on the worker, the employer, or the wider economy or society), the worker shall be entitled to carry forward such untaken leave”.

How will this affect the calculation of a payment in lieu of leave on termination?

The WTR have been amended so that where a worker’s employment has been terminated, the worker can receive a payment in lieu of the accrued holiday in the following leave year if the termination happens before the worker has taken the carried-over leave.

What about the employer’s right to refuse leave on particular days?

Whilst an employer may require a worker not to take leave on a particular day under Regulation 15(2) WTR (subject to giving notice which complies with the formalities under the regulations), the Amendment Regulations state that the employer will only be allowed to stop the worker from taking leave which has been carried over on particular days where the employer has “good reason” to do so. A “good reason” is undefined, but it suggests that employers should not unduly restrict when the worker takes the leave.

What about taking holiday whilst being placed on furlough leave?

It has now been stated in the HMRC guidance on the Coronavirus Job Retention Scheme that workers can take holiday whilst on furlough leave without it terminating furlough leave. The worker must be paid 100% of their “normal pay” if they take holiday whilst on furlough leave.

Whilst it has not been specifically confirmed that employers can make workers take holiday whilst on furlough leave it is our view that as this right exists under the WTR and the Amendment Regulations do not address this point, or remove this right, then it is acceptable do to so but employers should be aware that as the guidance is continually changing this could be amended in due course.

Are there any other changes to holiday pay?

As set out in our previous blog, from 6 April 2020 the calculation to work out “normal pay” for those taking holiday who are not salaried should now be done by taking an average of the pay earned in the last 52 weeks.

Please note this article should only be considered as guidance and should not be taken as specific legal advice. For further advice on this topic contact Kelly Gibson at Kelly.Gibson@tayloremmet.co.uk or 0114 218 4307.