Annual leave and paid holiday no longer “use it or lose it” after rules change

Employees are being reminded they are now legally entitled to carry over up to 20 days of annual leave to the next two financial years under changes to working time regulations.


Worcestershire employment lawyer Kate Jones said the move, introduced because of the coronavirus pandemic, benefits employees and their employers by removing the “use it or lose it” rush that comes with needing to take annual leave before the end of the relevant year.


The change to the working time regulations came as many workers either delayed taking time off, because lockdown meant there was nowhere for them to go on holiday, or were on furlough, meaning they continued to accrue their annual leave even though they could not work.


Many key workers, such as those on the front line of the NHS, were also unable to take leave because their efforts were vital to getting the country through the pandemic or because colleagues were sick or self-isolating.


Ms Jones, an associate in the employment department at law firm mfg Solicitors, said: “The working time regulations have been relaxed due to Covid-19 and if an employee didn’t manage to take all their leave within the employer’s holiday year, they can now carry over up to 20 days to use over the next two years.


“This is a big change because until recently, that annual leave would have been lost at the start of a new holiday year, unless there was a specific reason, such as sickness or maternity leave.


“With summer holidays abroad still uncertain for many people, it’s worth remembering you have the right to carry over your leave and don’t have to spend it at home doing nothing just to use it up, unless of course you want to.”


Ms Jones said employers should also have found the change in regulations helpful.


“For bosses, this means they won’t have to deal with lots of their employees all trying to book the same few weeks off at the end of their holiday year the way they might have been had they all been due to lose it.”


Employers are still obliged to do everything they reasonably can to allow a worker to take as much leave as possible in the current holiday year and most not unreasonably block a worker from doing so. They must also allow an employee to use their carried over leave at the earliest opportunity, but can also give notice to an employee to take leave to ensure it fits in with the needs of the business.


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