Holiday Balances (& Coronavirus, of course....)

Since the outbreak of Coronavirus, some businesses have seen a leap in sales and are busier than ever.  Some businesses are asking staff to work longer to cover ill or shielding colleagues, and other businesses are having to make redundancies, leaving remaining staff covering more work.  This may lead to workers accruing holidays they can't take in this holiday year.  In this post, I'm looking at UK holiday entitlements, the new 'carry over' legislation and how employers can deal with employees with high holiday balances.

UK Holiday Entitlements

In the UK, workers (including those on zero hours contracts) are entitled to a statutory minimum of 28 days.  This gives everyone the opportunity to take a break from work which supports overall well-being.  Some businesses offer holidays in addition to the 28 days – this is called ‘contractual leave’.

Whatever you offer by way of holidays, the employee’s entitlement must be clearly noted in their contract.  You also need process and policy in place for those with unused holiday at the end of your holiday year.

Along Came Coronavirus

In light of Coronavirus, the UK Government introduced The Working Time (Coronavirus) (Amendment) Regulations 2020.  The regulation is designed to help protect annual leave for those who can't take it in this holiday year.

It’s important to note that the legislation relates to the 28 days’ statutory requirement.  It does not apply to any contractual leave.  Follow your current policy or process for contractual leave.

Also note the phrase ‘reasonably practicable’.  Broadly, this means that if it has been possible for an employee to take holidays despite coronavirus, but they have chosen not to, the right to carry forward statutory entitlement under this legislation doesn’t apply.

With that in mind, here’s the lowdown from gov.uk:

What is reasonably practicable?

When considering whether it was not reasonably practicable for a worker to take leave as a result of the coronavirus, so that they may carry untaken holiday into future leave years, an employer should consider various factors, such as:

    • whether the business has faced a significant increase in demand due to coronavirus that would reasonably require the worker to continue to be at work and cannot be met through alternative practical measures
    • the extent to which the business’ workforce is disrupted by the coronavirus and the practical options available to the business to provide temporary cover of essential activities
    • the health of the worker and how soon they need to take a period of rest and relaxation
    • the length of time remaining in the worker’s leave year, to enable the worker to take holiday at a later date within the leave year
    • the extent to which the worker taking leave would impact on wider society’s response to, and recovery from, the coronavirus situation
    • the ability of the remainder of the available workforce to provide cover for the worker going on leave.

As an employer, you need to make sure you give your employees every possible opportunity to take their holiday in the holiday year that it is accrued.  If it’s really not possible due to Coronavirus, then it can be carried over for up to two years.  However, if your business or employee has not been directly impacted by Coronavirus, using the legislation to allow carry over may not be appropriate.


Dealing with High Holiday Balances

Large holiday balances can cause issues further down the line for your staffing levels.  Have a plan in place so that everyone can take leave without affecting operations.  Remember you cannot make a ‘payment in lieu’ for any part of the 28-day statutory holiday entitlement.  This means you can’t reduce an employee’s holiday balance by ‘buying back’ excess days.

I recommend you have an informal conversation with any employee who has a high holiday balance.  At this point in the year, I would suggest speaking to anyone who still has over half their entitlement not yet booked.  Ask the employee to put dates in the diary now.  If nothing happens following this conversation, speak to an HR professional to look at the next steps.

Top Tips

  • Make sure you know what holiday balances your team have.
  • Be clear on your policy for carry over and payment in lieu (only for days over and above the statutory 28 days).
  • Consider whether Coronavirus is a valid reason for your business to allow employees to carry forward statutory holiday entitlement. If not, ensure everyone is able to take the statutory minimum leave before the end of your holiday year.
  • Speak to an HR Specialist if you need further guidance - contact us.