Coronavirus – changes to rules on holiday

The spate of new legislation and guidance relating to the coronavirus pandemic continues apace with an amendment to the holiday provisions in the Working Time Regulations. The amendment is intended to ensure that key workers who do not take their holiday because of the current enhanced need for their services do not lose out on it. However, its application is not specifically limited to key workers.

Under the original Regulations, the 4 weeks’ minimum holiday which comes from the original European Working Time Directive (not the additional 1.6 weeks which are included in the Working Time Regulations in the UK) had to be taken in the year in which it accrued, and employers could not make a payment in lieu of that except on termination of employment.

This position has now been amended under the new rules, so that for the 4 weeks’ minimum leave, any leave which it was not reasonably practical for a worker to take because of the coronavirus pandemic can be carried over into the next 2 leave years.  This will apply even if the contract of employment (or the employer’s policies) specifically do not allow carry forward. The question of whether it was ‘reasonably practical’ includes consideration of the effects of the pandemic on the worker, the employer, the wider economy or society, so is very widely drafted.

In addition, if the individual’s employment terminates before they have been able to take the leave they have carried forward, the new rules ensure that the employer has to make a payment in lieu.

As this only applies to the 4 weeks’ minimum leave, different rules apply to the additional 1.6 weeks’ leave (where carry forward of up to 1 year may be allowed). And if the employer offers more than the statutory minimum holiday entitlement, then the position regarding that extra leave is governed by the contract. The question then may be which leave is ‘used up’ first – but unfortunately the law is not clear on this.

Example

For example, if someone who works a 5 day week has an entitlement of 25 days’ holiday plus Bank Holidays, then this would be made up as follows:

20 days = 4 weeks’ minimum leave

8 days = 1.6 weeks’ Working Time Regulations leave

5 days = contractual leave

Assuming they have a leave year that started on 1 April  2019 and since the start of the leave year they have used 3 weeks’ leave plus 8 Bank holidays , i.e. a total of 23 days, how much will they be allowed to carry forward if the virus has prevented them from taking it?

At the moment it is not clear whether the employee could successfully argue that the 10 days that are left are actually part of the statutory minimum leave and the employer must therefore allow them to be carried forward. For now, it would probably be safest for employers to assume that the leave would qualify for carry forward.

The amended Regulations also introduce restrictions on when an employer can refuse to allow an employee to take leave. The amendment states that employers can only refuse an employee’s request for a holiday when they have a “good reason” to do so. The term “good reason” is not defined, but is likely to be interpreted as anything which would materially impact the employer’s business, eg seasonal work or the need to have adequate staffing. It is difficult to see why an employer would refuse a holiday request if they did not have a good reason to anyway, but under the original Regulations they could do so if they wished.