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Can Employees Carry Over Holiday?

Employees do not normally have an automatic legal right to carry over annual leave from one year to the next. According to research by Glassdoor, around 40% of UK employees only take half or less of their annual leave allowance each leave year, with the average staff member taking 62% of their permitted annual leave. That said, more and more employers are now offering their employees the option to carry over their holiday entitlement as an additional benefit and to afford them greater flexibility and control. 

07 February 2023
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Understandably, many employees are unsure of their right to carry over their holiday entitlement into the following year. Whether you wish to transfer a couple of days of untaken leave or several weeks, your position will depend on the extent to which your employer is willing to exercise discretion and flexibility, the contents of your employment contract, and the statutory provisions within the Working Time Regulations 1998.

What is my statutory holiday entitlement?

The Working Time Regulations 1998 (WTR 1998) implements the Working Time Directive (2003/88/EC) (WTD) and sets out the statutory rules on holiday entitlement for employees. Under WTR 1998, full-time employees who work a five-day week are entitled to 5.6 weeks of annual leave (28 days). This is made up of four weeks of WTD leave plus an additional domestic right to 1.6 weeks of annual leave, which covers public holidays in England and Wales. Regulation 13(2) of the WTR 1998 states that a worker’s leave year is either provided in a relevant agreement (e.g. employment contract) or if employment began after 1st October 1998, “on the date on which that employment begins and each subsequent anniversary of that date”.

Can I carry over leave from one leave year to the next?

Regulation 13(9a) of the WTR 1998 states that the annual leave can only be taken “in the leave year in respect of which it is due”. In other words, employees have no statutory legal to carry over their WTD leave to a subsequent year.

When it comes to the additional 1.6 weeks of annual leave, under regulation 13A of the WTR 1998, this may be carried forward into a subsequent leave year if provided for in an employment contract or a collective agreement. Such a clause will normally state that workers can carry over a certain number of days (e.g. 5 days) of leave.

Is there anything to stop an employer from allowing leave to be carried over?

While the WTR 1998 does not include a carry-over provision for WTD annual leave, there is nothing to stop an employer from agreeing to allow an employee to transfer their leave from one holiday year to another. Many employment contracts contain a specific clause dealing with the carry-over of annual leave days. It may allow an employee to carry over all or a certain number of annual leave days. Your employment contract should make clear the following:

The number of days leave you can carry over to the following year

If there is any cut-off point by when carried over leave must be taken

How their policy on carried-over leave affects statutory leave, national bank holidays and any other contractual entitlements

 How to carry over leave to a subsequent year

It is important to note, however, your employer cannot make you carry over your WTD holiday entitlement, as this is your statutory legal right. As such, any agreement that states they can do so would be legally unenforceable. This means that your employer must allow you to take your WTD annual leave right up to the end of the year.

Circumstances that may allow leave to be carried over

According to established case law, there are some scenarios under which an employee can carry over their unused statutory holiday. This may be the case if, for example:

 An employer has advised a staff member that their leave will be unpaid hence deterring them from taking time off

 An employee has not been able to take their statutory holiday entitlement in the year due to maternity leave. In this situation, as established in the case of Merino Gomez v Continental Industrias del Caucho SA (C342/01) EU:C:2004:160, the employee must be allowed to take their untaken leave in the following year, or

An employee has not been able to take their four weeks of WTD leave due to sick leave

Final words

While it may appear clear-cut that employees are not entitled to carry over annual leave, in practice, employers are increasingly offering flexibility when it comes to how and when holidays are taken. In addition, there are many scenarios, as established by EU and UK case law, that may mean your employer should allow you to carry over your annual leave.

Guillaumes LLP Solicitors is a full-service law firm based in Weybridge, Surrey. We have an experienced team of employment law Solicitors who can assist you with any legal matter relating to your employment contract, including annual leave entitlement disputes. To make an appointment, please contact us or call us on 01932 840 111.