Workers in the UK are generally entitled to 5.6 weeks of paid annual leave each year. But what happens if someone doesn’t take their full statutory entitlement within the year?
In this guide, we explain the annual leave carry over rules and the impact of changes to the rules following the pandemic.
Carrying over annual leave
The 5.6 weeks of statutory holiday available in the UK consists of four weeks of yearly leave, as mandated by EU legislation and an extra 1.6 weeks provided by UK law.
If workers do not use all of their statutory annual leave entitlement during the relevant year, the employer can allow them to carry over the unused days to the following holiday year. The worker must take at least four weeks of holiday per year, as such, only additional holiday time can be carried over. This means the 1.6 weeks can often be carried forward once into the subsequent leave year, if there is a written agreement between the worker and the employer. The provisions for carrying over contractual yearly leave (beyond the minimum statutory entitlement) are governed by the worker’s contract and/or company policy.
However, the 4 weeks cannot typically be carried over into subsequent leave years, as such employers must enable the use of these weeks within the applicable leave year (‘use it or lose it’).
The exception to this rule is when an employee is unable to take annual leave due to maternity leave or illness; in these cases, the employer must allow the employee’s 4 weeks of leave to be carried over. When annual leave is carried over due to illness, it should typically taken within 18 months of the conclusion of the leave year for which it was originally scheduled.
Annual leave best practice
Entitlements
Every worker, whether part-time or full-time, is legally entitled to paid yearly leave. Workers have been allowed to 5.6 weeks of yearly leave since April 2009.
Multiply the number of workdays per week by 5.6 to determine your statutory yearly leave entitlement. For instance, if you work five days per week, you are eligible for 28 days of annual leave every year: 5 days x 5.6 weeks = 28 days per year.
The aforementioned is the minimal entitlement to paid employer, but your contract or terms and conditions may provide more. This is your contractual annual leave (as opposed to statutory annual leave).
The contractual entitlement to yearly leave cannot be less generous than the statutory entitlement. Contact us if your statutory or contractual leave rights are being refused.
Bank holidays
There is no automatic right to bank and public holidays under the law. Employers may include a paid day off for a bank holiday as part of the 5.6 weeks of annual leave required by employer. You should thus review your job contract to determine your yearly leave entitlement.
Part-time employees
Part-time employees should receive the same amount of public holiday yearly leave as full-time employees, calculated on a pro rata basis.
For instance, a staff member works three days each week, Tuesday, Wednesday, and Thursday, for six hours per day. This adds up to 18 hours every week, while full-time employees work 37.5 hours per week over five days. The average five-day workweek consists of 7.5-hour workdays. Full-time employees earn a total of 60 hours of bank holiday leave (7.5 hours x 8 public holiday days).
The part-time employee works 18 hours per week. 60 hours multiplied by 37.5 multiplied by 18 equals 28.8 hours. Therefore, the part-time employee should receive at least 28.8 hours of public holiday leave every year. This may be taken at any time with the employer’s consent.
Overtime & annual leave pay
The European Working Time Directive stipulates that workers and employees are entitled to four weeks of paid holiday per year. The Working Time Regulations allow workers and employees an additional 1,6 weeks of leave. In addition, contractual annual leave can be offered to employees as part of the terms and conditions of employment.
During annual leave, workers and employees have the right to receive their “regular” wage. Historically, standard pay included bonuses for productivity and commissions based on performance. It includes overtime as well.
For annual leave compensation reasons, overtime falls into three groups:
- Contractual overtime is overtime that the employer is required to offer and the worker is required to work as a condition of the employment contract.
- Non-contractual mandatory overtime is overtime that the employer is not required to provide, but if it does, it must be worked.
- Voluntary overtime can be refused by the worker.
In any circumstance, overtime is defined as hours spent beyond the minimum contracted hours. Therefore, it applies to both members working full-time and those working part-time.
Workers and employees have the right to have contractual overtime included in annual leave pay calculations. In 2014, the Courts ruled in Bear Scotland & Others v. Fulton & Others that workers and employees also have the right to have non-contractual mandatory overtime accounted for when calculating holiday pay for the Working Time Directive-mandated four weeks of statutory yearly leave. In the 2019 case East of England Ambulance Service NHS Trust v. Flowers et al., the courts extended this to cover routinely performed voluntary overtime.
Handling annual leave requests
Employer consent is required before a worker can take annual leave. There is no legal right for workers to select when they take annual leave; the employer can weigh the right to annual leave against the business’s operational requirements and the need to maintain adequate personnel levels.
There should be a defined procedure for workers to follow to request annual leave, as well as an annual leave policy outlining how requests should be decided and handled. Typically this will require the worker to provide advance notice when requesting a leave of absence. Generally, the notice time should be at least double the length of the leave to be taken; for example, to take two weeks off, the worker should provide at least four weeks’ notice.
Employers can refuse annual leave requests and in doing so must provide sufficient notice within a time frame corresponding to the requested leave. The employer should also be reasonable when handling requests for annual leave; for instance, following a fair procedure when handling several requests for the same day off.
Employers may also require workers to take all or a portion of the leave they are entitled to at specific times, as long as workers are given advance notice, for example, to maintain adequate staffing during peak periods. Details of such provisions should be included in the worker’s employment contract.
Need Assistance?
As employment law specialists, we can assist if you have any queries relating to holiday pay and workforce entitlements to pay and time off work. For advice on a specific employment issue, speak to our experts today.
Annual Leave Carry Over FAQs
What is annual leave carry over?
Annual leave carry over refers to the process where employees are allowed to transfer unused holiday entitlement from one leave year to the next. This is often subject to specific rules and conditions set by the employer or required by law.
How much annual leave can be carried over?
Under the Working Time Regulations, the general rule is that employees can only carry over up to four weeks of leave if they were unable to take it due to sickness or other specified reasons. However, additional leave may be carried over if stipulated by an employer’s policy.
Can employees carry over leave if they simply forgot to take it?
Typically, unused leave that was not taken due to reasons other than sickness, maternity, or other legally protected circumstances cannot be carried over. Employers may, however, choose to allow it as part of their internal policy.
What happens to carried over leave if an employee leaves the company?
If an employee leaves the company and has unused carried over leave, they are entitled to be paid for this leave as part of their final pay. The payment is usually based on their usual rate of pay.
Can an employer refuse to allow annual leave to be carried over?
Employers can generally set their own policies on carry over, as long as they comply with statutory requirements. This means they can refuse carry over of leave beyond the statutory minimum, provided the employee had the opportunity to take their leave within the leave year.
Is there a deadline for using carried over leave?
Carried over leave must usually be taken within the first two years following the end of the leave year in which it was accrued. Some employers may set stricter deadlines, so it’s important to refer to specific company policies.
What should employers include in a carry over policy?
A carry over policy should include clear rules on how much leave can be carried over, any deadlines for using carried over leave, and any conditions under which carry over is allowed. It should also outline the process for requesting carry over and any associated documentation requirements.
How should employers handle disputes over carry over leave?
Employers should have a clear, written policy in place and ensure that it is communicated to all employees. Disputes should be handled in line with this policy, with any disagreements ideally resolved through open discussion and reference to legal obligations.
Does long-term sick leave affect annual leave carry over?
If an employee is on long-term sick leave, they are legally allowed to carry over any untaken annual leave into the next leave year. This carried over leave should be used within a reasonable period, often within 18 months.
Can an employee be forced to take annual leave to avoid carry over?
Employers can require employees to take their annual leave by a certain date to avoid carry over, provided they give adequate notice—typically twice the amount of time as the leave period they want the employee to take.
Glossary
| Term | Definition |
|---|---|
| Annual Leave | Paid time off work that employees are entitled to take, typically for holidays, personal time, or rest. |
| Carry Over | The process of transferring unused annual leave from one leave year to the next. |
| Leave Year | The 12-month period during which employees must take their statutory annual leave. |
| Working Time Regulations | UK legislation governing working hours, including provisions on annual leave entitlements and carry over. |
| Statutory Entitlement | The minimum amount of annual leave that employers are legally required to provide to employees. |
| Accrued Leave | Annual leave that an employee has earned based on the amount of time they have worked in a leave year. |
| Sick Leave | Time off work that an employee is entitled to take when they are unwell and unable to work. |
| Maternity Leave | A period of leave that a woman is legally entitled to take before and after the birth of her child. |
| Policy | A set of guidelines or rules established by an employer regarding how certain situations, like carry over, are handled. |
| Final Pay | The last payment an employee receives from their employer when they leave the company, including any owed annual leave. |
| Legal Obligations | The duties that an employer is required by law to fulfil, such as providing annual leave and managing carry over appropriately. |
| Best Practices | Recommended methods or strategies that employers should follow to manage annual leave and carry over effectively. |
| Disputes | Conflicts or disagreements that may arise between employers and employees, often requiring resolution through discussion or legal means. |
Author
Founder and Managing Director Anne Morris is a fully qualified solicitor and trusted adviser to large corporates through to SMEs, providing strategic immigration and global mobility advice to support employers with UK operations to meet their workforce needs through corporate immigration.
She is a recognised by Legal 500 and Chambers as a legal expert and delivers Board-level advice on business migration and compliance risk management as well as overseeing the firm’s development of new client propositions and delivery of cost and time efficient processing of applications.
Anne is an active public speaker, immigration commentator, and immigration policy contributor and regularly hosts training sessions for employers and HR professionals
