How to Manage Annual Leave in 2021

Managing annual leave with furlough, accrued holidays and self-isolation can be far from a holiday. We’ve summed up what employers need to know about the latest legislation.

Watch our masterclass or read our article below to brush up on the latest rules and best practise when it comes to annual leave, carrying over holidays, furlough implications, and travelling abroad for your employees. At the end, you’ll also find a list of actions you can take forward for the rest of this year.

Carried Over Leave

In March 2020, the government introduced a temporary law to enable employees to carry annual leave from the previous year into 2021 and now 2022. Up to 4 weeks can be carried over if it was not practical to take holidays due to Covid-19 (not the full 5.6 working weeks entitlement or more if employees have enhanced holidays).

Employer or HR professionals can say no to requests to carry leave over, but to do so they must evidence that they’ve taken sufficient steps to remind workers to use their holidays in the current holiday year. Also if you’ve stopped workers taking annual leave due to the current circumstances, and/or you have not actively encouraged all staff to take their annual leave, you must allow staff to carry holiday over.

Ongoing Furlough Implications: Key Rules on Enforcing Holiday

• Furloughed employees can also take annual leave.
• You can enforce any employee to use their holidays, even an employee who is on furlough.
• Whatever holidays you require them to take, you must give them twice the amount of notice. For example, if you require them to take a week off, you must tell them two weeks in advance.
• We encourage employers to communicate this clearly in writing, to avoid any misunderstandings and complications in the future.
• If an employee is taking annual leave, they must be paid a full salary, even if they are on reduced pay due to being furloughed.
• The CJRS is planned to end at the end of September 2021. If a company is still not in a position to return their employees to work at that point, employers can either encourage or enforce annual leave (giving sufficient notice) to avoid lay-offs, short-time working, and a backlog of annual leave.

Managing Team Leave Balances

If you’re not getting many holiday requests, but need to balance out holiday requests throughout the calendar, this is what we’d recommend:

1. Carry out an audit on workforce annual leave usage
2. Encourage employees, especially those with lots of annual leave left, to book time off
3. Emphasise the importance of taking a break to prevent burnout and protect mental health (it’s not just for going on holidays abroad)
4. Impose a cut-off date that carried over holidays must be used by

Employees Travelling Abroad

Under current lockdown restrictions, UK citizens can’t travel abroad unless they have a legally permitted reason to do so. However, as lockdown restrictions lift, there are a few things to keep in mind when managing this from a HR perspective:

• Employees don’t need to inform their employer where they are going on holiday.
• An employer can’t stop an employee from going aboard on holiday. However, employers have a duty of care to their employees so you can advise against all travel to affected areas. You can also discourage travel abroad by pointing out that, should they have to self-isolate/quarantine on their return, they will not be paid. Note our use of the words advise and discourage here – not command!
• Employees can’t be told not to go abroad or which countries they may/may not travel to. However again an employer can advise where might be safe and the consequences of travel, such as self-isolation.
• As a general rule, employers can’t dismiss someone if they cannot work because of having to quarantine/self-isolate after a holiday. However, in certain instances if the employee breaches their contract, that might be grounds for dismissal. Tread carefully here though!

A Few Last Things to Remember

• Remember, the statutory right of annual leave is for a paid rest break from work, not a holiday abroad.
• You do not have to honour a request to cancel annual leave once it is approved. You can require employees to take the leave off if necessary – but be reasonable if this is the case and take it on an individual basis.
• You may want to allocate holidays to staff, given the required notice or more.
• You can enforce annual leave during an employee’s notice period, saving having to pay twice.
• If you allowed carry-over, and the employee chooses to resign, the employee is entitled to be paid the holiday days.
• Likewise, if someone goes on maternity leave, they will need to take their accrued holiday when they return.

What Actions Can You Take Forward

Based on what we’ve discussed above, here are the actions you can implement:

1. Take an audit of workforce holidays.
2. Get a policy in place – you might need to add in extra details about new circumstances and circulate it prior to restrictions being lifted.
3. Get a declaration and request evidence to ensure quarantining. This can include information such as where are they going, and do they know if they need to quarantine when they return, etc.
4. Review the maximum number of employees you can allow off at any one time.
5. Be mindful of approving holidays that overlap and consider having a ‘buffer’ on days where multiple people are off.
6. Remember your health and safety obligations. As you have an obligation to ensure a safe working environment, you might have to take actions to reduce risk.
7. Encourage employees to keep you in the picture at all times.
8. Remind employees to not pay for any holidays until their leave has been approved.
9. Keep fully informed of potential travel disruptions.
10. Be open, honest and transparent with your employees.

Would you like advice on your specific situation? With our HR services you can access our expert advisors at any time like an extension of your own team.