Most UK workers are entitled to 28 days annual holiday, which includes bank holidays. However, in regular times only a proportion of this can be carried over to the following year. Thus, in most situations, it is a case of “use it or lose it”; if you fail to take your annual holiday, then it is your loss, and you are not entitled to financial compensation.

Brexit and COVID-19 have both impacted these rules. For instance, employees who have failed to take all their statutory leave because of COVID-19 can now carry it over for the following two leave years. However, a previous ruling by the Court of Justice of the European Union (CJEU) placed additional requirements on employers to provide workers with accurate information on their outstanding leave, encouraging them to take it in the current year. Employers face financial penalties if they fail to do so. These requirements could change post-Brexit.

Here we look at the implications of these measures and how they emphasise the importance of deploying a leave management system and employee leave planner that provides accurate, up-to-date information on outstanding leave.

Statutory leave entitlement

UK law stipulates that full-time workers are entitled to a minimum of 5.6 weeks paid holiday a year. Part-time workers receive a pro-rata entitlement. Four weeks of this leave relates to EU law, with the additional 1.6 weeks being a UK entitlement. Only under exceptional circumstances are UK employers obliged to allow workers to carry the four weeks forward.

Ruling by the CJEU

In a landmark ruling, the Court of Justice of the European Union (CJEU) examined the legality of German employment laws. Under those laws, workers were entitled to financial compensation for untaken leave only if they had been prevented from taking leave after having previously requested it. The CJEU ruled that employers must not discourage workers from taking their due leave and must also:

· Update workers on their outstanding leave

· Provide accurate information regarding their lack of entitlement or otherwise to carry that leave forward in good time for them to take leave in the current year

· Inform them of when their entitlement to leave ends

· Encourage workers to take their annual leave.

By failing to comply with these rules, employers would lose the right to prevent workers from either carrying leave forward or claiming pay in lieu of untaken leave. This ruling applied across the EU, which at the time included the UK.

The impact of Brexit

Before Brexit, the CJEU ruling meant that any UK employers who fail to comply with these rules could not continue to prevent workers from carrying leave over. Furthermore, employers must take positive action to encourage workers to take their leave allowance. For instance, they could write to workers to inform them of outstanding leave, encouraging them to take it, and investigate why workers might have failed to take their due leave. For instance, if this was the result of pressure from their line managers.

Now that the UK has withdrawn from the CJEU, how will this impact annual leave regulations? It is improbable that any government would depart from all European Directives on worker rights. But there is likely to be a degree of divergence eventually.

Apart from the rules relating to carrying over leave, EU law states that workers on maternity or long-term sick leave can carry over their annual leave to the following year. Additionally holiday pay should include overtime payments and commission. Both of these would appear unpopular amongst employers. It was mooted that the government was considering repealing the inclusion of overtime in holiday pay and the requirement to record and report on workers’ hours. However, business secretary Kwasi Kwarteng confirmed to parliament that there are no government plans to reduce worker’s rights. For the time being, and until the impact of COVID-19 is behind us, any review of employment rights is on hold.

COVID-19 rules on carrying annual leave forward

As we have stated, workers who have not taken all of their statutory annual leave because of COVID-19 can now carry it over into the following two leave years. While the motivation behind this measure is to ensure that staff can work on the national fight against COVID-19 without losing their holiday entitlement, it also relieves pressure on employers to ensure workers take their leave during the year in which it’s due.

However, this easing of regulations comes with several caveats. The new regulations apply only to workers for whom it is “not reasonable” to take leave because of COVID-19, and this is open to interpretation as many factors are involved.

It would appear that the bottom line is that employers should continue to encourage workers to take annual leave when it is due and that workers should continue to request leave throughout the holiday year. When leave is carried forward, it should be taken at the earliest opportunity.


These measures and interpretations underline the need to maintain up-to-date, accurate information on outstanding leave. All stakeholders, including employees and HR, must have ready access to this information, especially when working remotely. For instance, this could be provided via an online staff leave planner. Ideally, employees should be informed automatically about their remaining leave allowance so that they can take appropriate action in good time and not miss out on their entitlements.

After years of tumult and uncertainty the Brexit transition phase ends on 31 December 2020, completing Britain’s process of leaving the European Union, so what will January 2021 bring for your business? Here are a few things to look out for.

Most things will be the same for now.

The end of the transition period means that the UK will no longer be bound to follow common EU policies and directives when it comes to regulations on businesses. This means that some of the rules that businesses in the UK are used to could potentially change. In the vast majority of cases though, there will be no immediate changes on 1 January 2021.

This is because the EU (Withdrawal) Act 2018 translated all EU regulations into UK law. The effect of this law is that if something is required, banned, or allowed by an EU regulation now, it will be required, banned, or allowed by a UK law from the 1stof January. This gives a degree of consistency to your business, at least in the short term, although the UK government will be able to change the rules using UK legislation in the future.

Working time and annual leave rules will not be based on the Working Time Directive.

Here at LeaveWizard, of course, we like to keep a keen eye on the laws surrounding annual leave, absence management, and working time. This is one of those areas we talked about in the first point, where nothing will change immediately. The major change to annual leave rules will be that they are no longer based on the European Working Time Directive (WTD), but instead directly based on British law.

This will, in fact, make very little difference to how annual leave works in the UK. The WTD provides a baseline of entitlements that every EU member state must guarantee to employees, but each country is free to offer more rights than this, and most, including the UK do. Leaving the EU does mean that the UK will be free to move below these minimums should Parliament decide to do so, but it seems unlikely that any party will see a political advantage in removing holiday entitlement from workers.

One thing that you can rely on is that we will always keep a watching eye on any changes to the rules. If there are any changes to annual leave regulations we will make sure that any changes are applied in the LeaveWizard platform so that you stay seamlessly up to date. We’ll also make sure to keep you up-to-date with any developments on this blog.

Entitlement to work.

One area of HR for UK businesses will see a definite change in 2021, and that is the rules around the entitlement of EU citizens to work in the UK, and UK citizens to work in Europe. As an EU member state, the EU granted all EU citizens the right to live and work in the UK, and UK workers received the same benefit in the EU. This arrangement continued through the transition period but will end on 31 December 2020.

If you are employing EU citizens in the UK then the government has announced that from 30th June 2021 you will need to check that any new employees who are EU citizens have the right to work, in the same way as you must for non-EU citizens. This will include the new Settled Status for those that have been living in the UK prior to Brexit. You don’t have to carry out checks on existing employees. If you have British employees working at your sites in EU countries, they will also lose the automatic right to work there, and you will need to make sure you follow the host country’s rules. UK and Irish citizens will carry on having the right to work in each other’s countries because of a common travel area from before either country joined the EU.

Stay in control.

In a period of change, it’s important the know that you are always following the rules. LeaveWizard offers a one-stop online leave and absence management platform that incorporates country-specific regulations to keep your business compliant.

See for yourself how seamless leave management works by booking your free online demo here.

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