Can Employees Carry Over Their Leave?

Employers are free to choose which 12-month period will serve as the company’s leave year. However, many companies may choose to set this from January to December. As a result, at this time of year it becomes very apparent who hasn’t taken all of their holiday allowance.

Some employees will want to carry their holiday allowance from 2019 to 2020. But can they?

Carrying over leave

Why?

There could be a number of reasons why employees are asking to carry over leave. For example, it could be that they felt they couldn’t afford to spend as much time away from their work, or may have even forgot to book it until it was too late. Whatever the reason, employers should take care before making the decision to allow any untaken leave to be carried over.

Legal entitlement

Generally, employees don’t have the legal right to carry over leave just because they want to—except in specific circumstances. This is largely down to the Working Time Regulations 1998. Employees receive four weeks of leave—or 20 days for someone working five days a week—attached to the year in which it’s accrued.

In other words, these four weeks cannot be carried over into the next leave year.

However, the remainder of the minimum yearly entitlement—1.6 weeks for a five-day-a-week worker—can be carried over to the next leave year. To do this, an arrangement should be agreed between you and the employee. Any additional, contractual leave can also be carried over.

If you allow employees to carry over leave but fail to permit it when asked, you could face a claim for breach of contract. Especially if you state the right to carry over the leave in the employment contract or handbook.

Sickness absence

The legal situation does change slightly if an employee has been away from work due to sickness.

Holiday entitlement continues to accrue during periods of sickness. So, if a worker is unable to use it in the given leave year, then court rulings on the topic say that employees can carry over their leave.

Here, the normal situation is turned on its head. The individual would be able to carry over the four-week leave period that isn’t normally permitted to be carried over. However, they would not be able to take any additional time into the next leave year unless the employer permitted it.

Should I allow holidays to be carried over?

Often companies will not allow holidays to be carried forward into the next holiday year. Although you may be tempted to allow leave carry overs in order to avoid employee disputes, be wary.

Without a contractual provision that permits this, granting additional annual leave to one employee can cause unrest and potentially lead to claims of preferential treatment. It could also result in a member of staff taking prolonged periods away from work when they’re needed. The prospect of extended time off in the next leave year could very well leave employers short-staffed and unable to meet customer demand.

Expert support

If you're having trouble managing holiday entitlement, speak to a Croner expert on 01455 858 132.