In order to implement the lockdown the government has introduced, as a temporary emergency measure, new regulations relating to the carrying over of statutory holidays.  This post considers the wording of those new regulations and issues arising.

The Working Time (Coronavirus) (Amendment) Regulations 2020 (WT(C)(A)R) has introduced a new provision for carrying over some statutory annual leave during the Coronavirus period.  The leave that is affected is the 4 weeks basic leave derived from EU law under the Working Time Directive (WTD).  This was enacted into UK law by the Working Time Regulations 1998 (WTR) regulation 13.  There is a further 1.6  weeks additional leave provided by the Working Time (Amendment) Regulations 2007 (WT(A)R) regulation 13A.  The WT(C)(A)R does not apply to this additional leave, presumably because regulation 13A is not derived from EU law.  The different roots of statutory annual leave has resulted in different interpretations by the courts.  For example both the UK courts and the ECJ has held that a worker who is on sick leave is entitled to carry over untaken basic leave, but not untaken additional leave.  Additional leave accumulated during sick leave can only be carried over if the employer enters into a ‘relevant agreement’ to do so, namely a collective agreement incorporated into the individual contract, a workforce agreement, or an individual contractual agreement in writing.

Under the WTR regulation 13(9) a worker is not permitted to carry forward untaken basic leave to a subsequent leave year.  This provision has been held to  be incompatible with the WTD where the reason was that it was not possible for the worker to take that leave eg due to being on sick leave, maternity, paternity or adoptive leave.  However with the onset of COVID-19 and the subsequent lockdown many workers may feel that they have been prevented from taking their leave not because they were sick but due to being required to stay at home.  To address this issue,  regulation 13 has been amended to provide:

  • new regulation 13(10)  - permitting a worker to carry over untaken leave where it was “not reasonably practicable” to take some or all of the leave as a result of the effects of coronavirus (including on the worker, employer, economy or society);
  • new regulation 13(11) – permitting untaken leave to be taken in the following 2 leave years; and
  • new regulation 13(12) – requiring an employer to have a “good reason” to refuse to permit a worker to take carried over leave on particular days.

Regulation 14 has been amended to permit payment in lieu of any carried over leave if employment is subsequently terminated

Contractual agreements are not affected by the regulations and may provide for an enhanced leave or carry over.

The ACAS guidance suggests that the new provisions apply to holiday that the worker does not take because they are self-isolating, sick or had to continue working and could not take holiday.  ‘Self-isolating’ refers to those who are staying at home for 7 days due to coronavirus symptoms or for 14 days due to a member of the household having symptoms. The ACAS Guidance also suggests that an employee or worker “may” be able to carry over holiday if they have been furloughed and “cannot reasonably use it in their holiday year”.

Unfortunately, there remains a number of areas of uncertainty:

  • What would constitute ‘not reasonably practicable’ has not been defined.  The concept is a familiar one to employment lawyers since it is the same wording used for extending time limits under the ERA 1996.  In that context, it means something more than what is physically possible but is not as broad a concept as what is reasonable.  The ACAS Guidance reflects the uncertainty since it states that the provisions “may” rather than “will” apply to those who have been furloughed.  The issue arises because furloughed workers are entitled to take annual leave (see recent Government Guidance on the Coronavirus Job Retention Scheme), so on one view it would be “reasonably practicable” for them to do so unless the employer refuses to agree (for eg financial reasons).  Even less clear is the position of those workers (whether or not they have been furloughed) who may not wish to take annual leave given the restrictions on leaving home and travel imposed by the lockdown.  Given that regulation 13(10) is designed to mitigate the effects of coronavirus it remains to be seen whether it would permit carrying over of annual leave due to the Government imposed restrictions on movement.
  • The provisions do not appear to apply to those wider group of workers staying at home because they are either (a) in the “shielded group” of extremely vulnerable (ie those who are in receipt of the government letter telling them to stay at home for 12 weeks due to a specified underlying health condition) or (b) in the broader group of vulnerable persons ie those over 70 years, pregnant, with a long term health condition or caring for someone with a long term health condition.  If non-shielded / non-vulnerable employees are permitted to carry over leave then it would be potentially discriminatory to treat these groups differently.
  • What would constitute a “good reason” for an employer refusing permission to take annual leave is also not defined. 
  • Since the new regulations only apply to carrying over basic leave, in the absence of any contractual agreement the question arises as to whether the different types of leave have to be taken in any particular order.   The caselaw on this is already far from clear.  The EAT in Bear Scotland Ltd v Fulton [2015] presumed (without the point needing to be argued) that basic leave should be deemed to have taken first, then additional leave, then any contractual leave.  However the NICA in Chief Constable of the Police of Northern Ireland v Agnew [2019] held that there is no requirement that leave from different sources is taken in a particular order ie each day’s leave is to be treated as a fraction of the composite whole.   

So whilst the regulations are certainly a welcome development, they do throw up some legal issues and uncertainties that in the absence of clarification from the Government are only likely to  be resolved through the courts.