Under the Working Time Regulations 1998, employees have the right to 28 days’ annual leave per annum. This can include the eight bank holidays in the UK, if the employer chooses. There is no right in the Working Time Regulations 1998 to carry forward untaken annual leave to the next holiday year. Does that mean, therefore, that any annual leave to carry over is lost?
This was the question referred to the Court of Justice of the European Union (CJEU) in the case of Max-Planck-Gessellschaft v Shimizu . German law meant that any untaken leave was lost, and the employee in question had not taken all his annual leave. The question referred to the CJEU was whether it is lawful to simply say that the leave is lost or whether the employee is able to carry over the annual leave.
The CJEU ruled that it is only lawful to say that leave is lost if the employee has ‘specifically and transparently’ been given the opportunity to take leave. This means that the employer must have reminded the employee of any outstanding leave, encouraged the employee to take it and made it clear that the leave would be lost if it were not taken.
(NB: This ruling only applies to the 4 weeks of annual leave that is allowed according to the EU Directive. The UK legislation is more generous than the minimum.)
- Review annual leave at least 3 months before the end of your holiday year. Contact any employees who have not booked all their leave and remind them of the need to take it rather than carry it over.
- Encourage employees to take their annual leave regularly throughout the holiday year, so that large amounts of leave do not get left until the last few months of the year.
- You do not have to automatically allow employees to carry leave forward (unless this is provided for in your own annual leave policy) but if you have not told them that they must take their leave, and given them the opportunity, you would have to allow them to carry over the annual leave into the next holiday year.
If you have any questions about annual leave, please contact our Employment Team.
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