Employers should do everything reasonably practicable to allow workers to take as much of their leave as possible in the year to which it relates, and it is best practice for them to give workers to the opportunity to take holiday at the earliest practicable opportunity. It is unlikely that workers who are on furlough will need to carry forward statutory annual leave, as they have the right to take it during the period of furlough. As previously discussed, employers will be required to pay the correct holiday rate which is likely to be higher than the amount they can claim through the Coronavirus Job Retention Scheme (CJRS), so they must make up the difference. If the employer is unable to fund the difference this would make it not reasonably practicable for the worker to take their leave, meaning that they could carry their annual leave forwards. The worker must still have the opportunity to take their annual leave, and to receive the correct amount of holiday pay before the carried annual leave is lost at the end of the next two leave years.
Examples of what may be reasonably practicable:
• A worker has two weeks of holiday left and their leave year ends in two months. A significant proportion of the employer’s workforce is unable to attend work during those two months due to coronavirus. The employer reviews the steps it could take to manage the two month period and this highlights the fact that it is not reasonably practicable for the worker to take both weeks of holiday in the reminder of the leave year. The employer and the worker are in agreement that one week of leave will be taken as part of the leave year and the additional week will be carried forwards to be taken as early as possible • A worker has just commenced a new leave year so had their full entitlement to take over 12 months. Their employer experiences a surge in demand that is expected to last for a period of three months. The employer and the worker agree that it would not be reasonably practicable for the worker to take holiday in the three months in which demand had decreased but that it will be possible for the worker to use their full entitlement in the remainder of the leave year, so there is no requirement to carry holiday forwards Where workers carry leave forwards due to coronavirus, they continue to accrue holiday in the following leave year, so they will have two entitlements. They are the holiday that has been carried forward to be taken in the next two leave years, and the entitlement relating to the new leave year. Holiday pay for leave carried forward should be calculated in the same fashion as the standard calculations for holiday pay.
A useful example illustrates this:
• Due to coronavirus, a worker carries two weeks of holiday into their next leave year. For that leave year, they will have a total of 7.6 weeks of statutory holiday entitlement, consistent of the two weeks carried forward and the 5.6 weeks they are entitled to in the new leave year. When a worker with these two entitlements takes holiday, it would be best practice to allow the worker to take holiday from whichever entitlement expires first. They should be entitled, in this scenario, to take the holiday they are entitled to in the new leave year before taking the carried forward holiday as that lasts for a period of two years. Workers must be allowed by their employer to take carried forward holiday, and they must have good reason for refusing any holiday requests under this entitlement. Employers can request that workers take their carried forward holiday as opposed to their regular entitlement. The employer must, however, still ensure that the worker receives their full regular entitlement in the leave year to which it relates.
Where carried forward leave is taken into a further leave year, the employer must allow the worker to take their leave within that later year.
There is no requirement to give workers notice they will be able to carry holiday forward if they do not take it but it is unlawful for businesses to prevent workers from taking holiday that they are entitled to. Therefore, to ensure that workers do not miss out on their holiday entitlement, best practice is for employers to advise workers of the need to carry forward, and how much leave will be carried forward. Where it is reasonably practicable for a worker to take annual leave, employers should facilitate this, and the employer’s ability to require a worker to take annual leave is unaffected by the ability to carry forward holiday. Broadly, employers remain able to require workers to take annual leave to ensure that holiday is taken in the leave year to which it relates.
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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