Navigating the new normal

Announced changes to the Working Time Regulations – what do they mean for employers and workers?

All content on this page is correct as of March 30, 2020

Under the Working Time Regulations 1998 (WTR), workers are only allowed to carry over up to 1.6 weeks of leave to the next holiday year, at the employer’s discretion. The remaining four weeks to which every worker is entitled cannot be carried over and are ‘lost’ if untaken, except where the worker has been unable to take them due to long-term sickness absence or family-related leave.

The Government has now amended the Working Time Regulations 1998 (WTR) to allow workers to carry forward the four weeks of annual leave that would otherwise have been lost where they are unable to take it due to coronavirus.   

The Changes 

  • Workers will be allowed to carry forward up to 4 weeks of leave in any leave year where “it was not reasonably practicable” for the worker to take this leave due to the effects of COVID-19.
  • The effects of COVID-19 include the effects on the worker, the employer or the wider economy or society.
  • This leave will need to be taken in the two leave years immediately following the leave year in respect of which it was due.
  • An employer may restrict the days on which a worker can use this leave, but only where it “has good reason to do so”.
  • On termination of employment, the worker will be entitled to be paid in lieu of any of this carried over but yet untaken leave (in addition to any other accrued but untaken leave).

Why is this good news?

There is an obligation on an employer to ensure that their workers have an adequate opportunity to take their holiday. In addition to the “use it or lose it” conditions described above, employers are not allowed to pay workers in lieu of untaken holiday under the WTR, except on termination of their employment. Therefore workers cannot be offered a sum of money in return for foregoing their holiday.

The amendments to the WTR should help alleviate pressure on employers, who otherwise would be faced with two significant challenges:

  • accommodating requests by those carrying out essential work at a time when they are urgently needed, without being able to provide any assurances of when they could otherwise take leave in 2020;
  • accommodating requests from the general workforce in a condensed time period or at the same time once the effects of COVID-19 (social-distancing requirements, business closures and travel restrictions) are lifted.

Crucially, as a result of the changes, employers will be able to ask their workers to postpone their holidays if required, due to the exceptional circumstances we are currently facing, while all workers unable to take holiday due to the effects of COVID-19 will see their annual leave entitlements preserved and will not be pressured to take this all at once. 

What employers should think about?

Going forward and in light of the changes, employers should consider:

  • Dealing promptly with requests to postpone already booked holiday leave.
  • Reviewing any previously declined requests by employees to cancel holiday.
  • Discussing at an early stage with employees their ability to carry over their annual leave as a result of the changes to the WTR.
  • Being clear when turning down holiday requests and explaining to workers their rights in the current circumstances.
  • Keeping a clear log about when holiday is taken and what amount of leave is being carried over due to COVID-19. Leave carried over due to COVID-19 should be clearly identifiable given it will need to be treated in a different manner than other forms of carried over leave. 
  • Reminding employees that these four weeks of holiday leave can only be carried over where leave was not taken in the current holiday year due to the effects of COVID-19. Employers should however bear in mind that workers will be affected differently by COVID-19 depending on their personal and work circumstances. 
  • Promoting the benefits of workers taking some annual leave over the next couple of months for their health and wellbeing.
  • Remember that workers who are furloughed will still accrue holiday while not working.

This information is necessarily of a general nature and doesn’t constitute legal advice. This is not a substitute for formal legal advice, given in the context of full information under an engagement with Bates Wells.

All content on this page is correct as of March 30, 2020.

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