Changes to the rules of carryover of annual leave as a consequence of Covid19

07 Aug 2020

The Working Time (Coronavirus) Amendment Regulations 2020 which came into force on 26 March provide for some or all of the four weeks’ statutory annual leave (20 days) to be carried over for a period of two years where “it was not reasonably practicable to take some or all of the statutory leave as a result of the effects of coronavirus (including on the worker, the employer or the wider economy or society)”.

It applies to all workers including agency workers. Workers who cannot take annual leave (such as those on long-term sick leave and maternity leave) are not included. 

HMCTS has indicated: “It will be for staff and line managers to agree where the impact of the Covid-19 pandemic has been the reason for leave not being taken or pre-booked leave being cancelled.”

Regrettably, no guidance has been consulted upon or provided in order to ensure a consistency of approach and fairness and reasonableness in interpretation of the regulations.

General rule: "Use it or lose it"

Contractually, usually, a full-time employee can carry 5.5 days annual leave over into the next year. Those entitled to 30 days annual leave can carry over 10 days. Additional holiday entitlement cannot be carried over into subsequent leave years so workers must either "use it or lose it" save where that leave cannot be taken because of sickness absence. There is an obligation on employers to ensure that there is adequate opportunity for workers to take their holiday entitlement. Failure to do so could result in financial penalty. 

The obligation is there for good reason. Annual leave allows employees to take paid time off from work for the purpose of having regular breaks so that they can rest and re-energise. Hoarding large amounts of untaken leave can have a detrimental impact on workers' mental and physical health. PCS would encourage staff where they can to continue to apply for and take annual leave as they ordinarily would.

Carryover of leave cannot be mandated

The regulations permit the carryover of holiday. They do not mandate it. If a member wishes to take their full holiday entitlement this year then these regulations do not allow an employer to defer holiday into 2021 as a right. The regulations permit the carryover of holiday if both parties agree.

Reaching agreement where member requests carryover

Reaching agreement requires a fair and balanced consideration of an individual’s circumstances. PCS has received a number of concerns raised by members about their being ordered back to work with very little or no consideration of their individual circumstances, under threat of disciplinary action and loss of pay for those staff who do not return. This is despite guidance to the contrary. PCS is concerned that in the absence of guidance managers may feel under pressure to think only in terms of “business” need.

The circumstances where the right to carry over statutory annual leave would apply seem on the face of it to be fairly wide because they are not limited to the effects on the worker. ACAS suggests that it might not be reasonably practicable for a worker to take annual leave due to the effects of coronavirus where a worker:

  • Is self-isolating or too sick to take holiday before the end of their leave year.
  • Has been temporarily sent home as there’s no work
  • Has had to continue working and could not take paid holiday.

This it therefore appears to cover, for example, the situation where workers are unable to take the leave because of working commitments. PCS also believes that this would cover where the worker is unable to take leave as part of their right to a family life because their partner for example is unable to take leave at the same time due to the effects of the virus. This could be for the same reasons set out above. The regulation is widely drawn in order to achieve fairness and to cover a wide variety of circumstances.

Absence of agreement

In theory the test should be relatively easily met, since if both parties agree holiday should be carried over, there is going to be no one to dispute the necessary linkage back to the challenges created by the coronavirus. Difficulties are likely to arise where there is not agreement and where the employer maintain the request to carry forward is a matter of personal choice rather than inability or the link is said to be too tenuous. Members are advised to initially speak to a manager, if it appears that agreement cannot be reached, members should then set out the request in writing including as much detail as possible for the application.

If your request is refused you should respond with the following: ‘Thank you for your response and for confirmation that my application to carry over leave has been denied. I write to advise that I object to the decision and reserve the right to challenge this at a future date upon taking advice.’

You should speak then speak to a rep for further advice - find their details on PCS Digital. If the annual leave that the employer refuses to carryover is the statutory 4 weeks leave and the reason the worker requested that it be carried over was because it was not reasonably practicable for the worker to take it as a result of the effects of coronavirus, a claim can be brought in an employment tribunal for a declaration. The time limit for any claim is three months less one day of the day it is alleged that the right should have been permitted. An employee must exhaust the internal options provided by the grievance procedure before considering any tribunal claim. It is It is therefore important that you take advice and act promptly in order to ensure that if you have the grounds to exercise this right (which will depend on the circumstances), you protect that right.

Identifying relevant leave

One issue that may arise is over determining whether the leave to be carried over is the statutory 4 weeks leave, the additional 1.6 weeks leave and any additional contractual leave. There is case law which has held that an individual's holiday entitlement must be considered a "composite whole", which means that it can’t be separated and on that basis a worker could assert that the annual leave which carries over relates to the four weeks of statutory leave.

Impact on leaving the department where leave has been carried over

The new rules mean that if the contract is terminated within the two additional leave years, a worker can receive a payment in lieu of any of the statutory holiday they have carried over under these new rules, but have not taken at the time of termination. It will still be open to the employer to require the individual to use up their holiday leave before the termination date, as is often the case in HMCTS now. The key point is that leave is not lost.                                                  

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