Leave Carry Over

Did you know? Out of the 5.6 weeks of leave entitlement - 4 weeks of leave are entitled in the current year and 1.6 weeks of leave can be carried over to the next financial year. Know other benefits here.
  • Author: Siva
  • Last updated: August 2, 2022
  • 5 Minutes
leave carry over at workplaces in the UK explained by Papershift

With the holiday season fast approaching, many employees will be planning their holidays with some who have not used their full entitlement from last year looking for an extended break this summer. Others may be planning longer breaks next year when the turmoil of COVID 19 are finally in the rear-view mirror.

For employers the challenge of tracking and managing leave requests whilst adjusting for leave carry over can be daunting and, in some cases, almost impossible.

But what is leave carry over and are staff entitled to it?   

In this guide, we will look at the rules about holiday-carry over, how it can be handled in the workplace, as well as any legal issues that might arise from its use. 

Let’s get started.  

What Is Leave Carry Over?

Leave carry over (or annual holiday carry over as it is often called) is where employees are allowed to carry forward any remaining holiday days from one year to the next.

The Working Time Regulations gives workers the right to 5.6 weeks of annual leave in each leave year. This law specifies that 4 weeks of this entitlement must be taken in the leave year to which it relates, while the remaining 1.6 weeks can only be carried over by agreement with the employer for one leave year. There are a few exceptions to this, including where workers cannot take annual leave due to maternity leave or sickness. 

The ability to carry over leave is entirely at the discretion of the employer under the Working Time guidance and employees have no legal right to carry over any unused leave.

The rules were adjusted in light of the COVID 19 pandemic, but with the workplace returning back to normal, the old guidance is slowly returning to use.

How did the rules change for the COVID 19 Pandemic?

The COVID 19 pandemic affected many areas of the home and working environment. Not only were employees forced to work from home, but they were often prevented from taking holidays due to lockdown or travel restrictions. Because of this, the UK Government issued revised rules regarding how annual leave entitlement could be used giving workers more opportunities to carry over leave. This allowed workers to use up leave entitlement once the pandemic eased. 

Legislature on leave carry over during pandemic
“In any leave year it was 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)”.

Did this amend Working Time Regulations?

Yes, it did… at least for a time. In March 2020, the UK Government announced that existing Working Time Regulation regarding carrying over annual leave from one financial year to the next would be relaxed. Any worker who has not taken all their statutory annual leave entitlement due to COVID 19 was given the opportunity to carry any remaining days over into the next 2 years.

The relaxation of the existing rules was intended to provide businesses affected by COVID-19 with the flexibility to better manage their workforce, while protecting employees’ rights to paid holiday. 

As the COVID pandemic lessened, the rules have slowly returned to normal. The 2 year carry over period is coming to an end with the current tax year, so the ability to carry holiday entitlement forward is set to revert to the pre-COVID rules stated above.

Do the rules for leave carry over apply to those on zero-hour contracts?

The Working Time Directive rules apply to almost all workers, including:

  • Agency workers
  • Those who work irregular hours
  • Workers on zero-hours contracts. 

This means the ability to carry over leave applies to nearly all employees. The main exception is those who are genuinely self-employed and people who are Directors of companies.

So, under normal circumstances I can’t carry over leave?

Yes and no. Unless your employer allows you to carry leave over you can’t. Under the Working Time Regulations 1998, the general rule is that statutory leave may only be taken in the leave year to which it relates. If it isn’t, it is lost. This is sometimes referred to as the “use it or lose it” rule. 

There is nothing to prevent an employer from allowing a worker to carry over unused annual leave if the worker cannot take it in the relevant leave year. However, the employer cannot compel a worker to carry over holiday entitlement and they are perfectly within their right to refuse an employee’s request to do so.

In some rare situations, however, an employee may be legally entitled to annual leave carry over (see below).

What are the exceptions for statutory annual leave carry over?

There are some circumstances in which the law states that employees should always be permitted to carry over unused statutory holiday to the next leave year or beyond. These include:

  1. Where a worker has been unable to take their holiday entitlement because of maternity leave. 
  2. Where a worker has been unable to take their holiday because of taking sick leave. Employers are legally allowed to limit carry over in the case of long-term sick leave. Generally, any holiday not used up within 18 months of the end of the leave year in which it was accrued is lost by an employee.
  3. Where a worker did not have an effective opportunity to take their holiday entitlement. This may be due to pressures of work. 

In Conclusion

Annual leave carry over is a complicated subject and one that many businesses and employees fail to understand. In many cases employees wrongfully believe they have a right to leave carry over when in actual fact it is up to their employer if they wish to make it available.

We hope, with the help of our guide, you now find the subject easier to understand.

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Written by Siva

I write & describe the value & benefits delivered by Paperhift's rota planning, staff time tracking, and employee payroll management software. Especially useful for Shift Planners, Rota Managers, Team Admins, and HR Teams :-)