8 December 2020

The end of 2020 is almost here, and with that, many companies’ holiday years will also be coming to an end. Employers should be mindful that many employees may have more than usual annual leave accrued but untaken at this point in the year, and queries may arise as a result.

Q.  What is unique about annual leave entitlement this year?

A.  There are a number of points to consider which are unique to this year:

• The Working Time (Coronavirus) (Amendment) Regulations 2020 allows employees to carry over four weeks of annual leave into the following two years, where it is not reasonably practical to take it in the annual leave year due to the effect of coronavirus on the employee. This is likely to be applicable to key-workers who have had to be on the front-line and work throughout the pandemic, without having the opportunity to take any time off. This will not apply just because employees have not wanted to take time off due to travel restrictions, furlough or lockdown limitations.
• If employees are – or have been – on furlough, they likely will have accrued many days of annual leave. Whilst they are able and can take annual leave whilst on furlough and be paid in full, many will have not done so.
• Even employees that have not been on furlough may have many accrued but untaken holiday days as they have not had the same opportunities to travel such as in previous years.

How employers can deal with accrued but untaken annual leave:

Q.  Can the employer impose a requirement for leave to be taken?

A.  Employers can require employees to take their annual leave entitlement, provided that they are given twice as much notice as the holiday they require the employees to take. Therefore, employers can ask employees, including those on furlough, to take their remaining annual leave entitlement before the end of the holiday year, if they so wish.

Notwithstanding the above, most companies will carry on as normal and communicate to employees that for holiday purposes, this year is like all other years (other than in respect of key-workers). Employees must therefore take their annual leave as normal or lose them when the holiday year lapses unless they are contractually allowed to carry over annual leave. This is also true for employees on furlough as long as they are paid in full for the annual leave entitlement that they take.

Q.  What should the employer do now?

A.  In any event, it is worth employers:

• Reviewing how much annual leave employees have remaining,
• Reminding employees to take annual leave as usual by the end of the holiday year, and
• Discussing holiday plans with employees and discussing when annual leave can be taken to ensure it is convenient to both the business and the employee.

This will ensure both parties are clear as to the position with annual leave this year and will allow employers to be able to manage and mitigate any liability that may arise.

We will update this Q&A as and when further guidance is published.

Please click here for more information about Lee & Thompson’s Employment practice or contact James Baker, Head of Employment, if you have any employment-related queries.