Covid-19 and holiday entitlement - what you need to know…

• The Working Time Directive (WTD) entitles every worker within each member state to paid annual leave of at least four weeks, with the conditions for entitlement to such leave being set by national legislation or practice.

• The Working Time Regulations (WTR) entitles every worker to 5.6 weeks' annual leave in each leave year. This is equivalent to 28 days for those who work five days a week. This is made up of:
  • The right under the WTD to a minimum of four weeks' annual leave (20 days for full-time employees) each year.
  • The domestic right to an additional 1.6 weeks' annual leave (8 days for full time employees) each year, which represents the number of public holidays in the UK in a year. However, there is no need to use these days on public holidays.

• Subject to changes introduced in relation to the COVID-19 outbreak, under the WTR, WTD leave (that is, the four weeks' leave) may only be taken in the leave year in respect of which it is due. In other words, it must be taken in the leave year to which it relates, or else it is lost. WTR leave (that is, the 1.6 weeks' leave) may be carried forward into the next leave year in accordance with a relevant agreement.

• The government introduced emergency legislation on 26 March 2020 relaxing the restriction on carrying over annual leave to allow businesses under particular pressure from the impact of COVID-19 the flexibility to manage their workforce while also protecting workers' rights to paid leave. Essentially, WTD leave can be carried over where it was "not reasonably practicable" to take it in the leave year" as a result of the effects of the coronavirus (including on the worker, the employer or the wider economy or society)". It is not yet clear what circumstances will mean that it was not reasonably practicable to take leave within the relevant leave year. Acas has suggested that it could apply where a worker:
  • Is self-isolating and too sick to take holiday before the end of their leave year.
  • Has been put on lay-off or furlough leave.
  • Has been required to continue working and could not take paid holiday.

• Under the legislation, WTD leave may be taken in the two leave years immediately following the leave year in respect of which it was due. Employers will only be able to require a worker not to take carried-over leave on particular days where they have a "good reason" to do so; this is undefined.

• The legislation also ensures a worker will be paid in lieu of any untaken carried-over holiday where their employment is terminated before they have had a chance to take it

• Statutory holiday entitlement may not be replaced by a payment in lieu, save where the worker's employment is terminated

• A part-time worker is entitled to 28 days' holiday reduced pro rata, according to the number of days they work each week. This can still be expressed as 5.6 weeks' leave.

• No minimum period of continuous service is required to qualify for statutory annual leave.

• A worker whose employment begins or ends part way through a leave year has a pro rata statutory holiday entitlement for that year.

• A worker must give notice if they wish to take statutory holiday. The notice must be at least twice the period of leave requested.
  • Example: worker's notice. If the worker wants to take five days' leave, they must give at least ten calendar days' notice.

• An employer may refuse a worker's holiday request by serving a counter-notice. This must be given at least as many calendar days before the date on which the leave is due to start as the number of days which the employer is refusing.
  • Example: employer's counter-notice. If the worker has requested six days' leave and the employer wishes to refuse five days of the request, it must give notice at least five calendar days before the date on which the leave was due to start