Quick Answer: Can UK Employees Carry Over Holiday?
The statutory position on carry-over depends on which part of the 5.6-week entitlement is involved:
- 4 weeks (EU-derived): Generally must be taken in the leave year. Cannot be carried over unless the employee was prevented from taking it (sickness, maternity, or employer failure to facilitate leave).
- 1.6 weeks (additional UK entitlement): Employers can set their own rules. Many allow limited carry-over; some apply use-it-or-lose-it.
- Contractual leave above 5.6 weeks: Entirely governed by the employment contract or company policy.
The Legal Framework for Carry-Over
Working Time Regulations 1998
The Working Time Regulations (WTR) establish the statutory minimum of 5.6 weeks' paid annual leave. The Regulations distinguish between:
Regulation 13 leave (4 weeks): Derived from the EU Working Time Directive. This leave must generally be taken during the leave year in which it accrues. The WTR originally stated this leave could not be replaced by a payment in lieu (except on termination) and could not be carried over.
Regulation 13A leave (1.6 weeks): The additional UK entitlement added in 2007. The WTR allows employers to make provision in a relevant agreement for carry-over of this leave, or to restrict it.
Case Law That Changed Everything
Several landmark cases have expanded carry-over rights significantly beyond the original statutory wording:
Stringer v HM Revenue and Customs (2009): The European Court of Justice ruled that workers who were unable to take their Regulation 13 leave due to sickness must be allowed to carry it over. This applies even if the sickness lasts for more than one leave year.
King v Sash Window Workshop (2017): The ECJ ruled that a worker who was denied paid holiday (because they were classified as self-employed) could accumulate untaken leave and claim it all on termination. There was no time limit on the accumulation.
Kreuziger v Land Berlin (2018) and Max-Planck-Gesellschaft (2018): These cases established that employers bear the burden of proving they took all necessary steps to enable workers to take their leave. If the employer cannot show they encouraged leave-taking and warned of the consequences of not taking it, the leave carries over automatically.
TSN v Hyvinvointialan (2019): Clarified that carry-over rights apply specifically to the 4-week EU-derived entitlement and do not automatically extend to any additional entitlement.
The COVID Carry-Over Regulations
The Working Time (Coronavirus) (Amendment) Regulations 2020 allowed workers to carry over up to 4 weeks of statutory leave into the following two leave years where it was not reasonably practicable to take leave due to COVID-19. This provision was temporary and any carried-over leave from the COVID period has now expired for most employers.
Practical Carry-Over Scenarios
Scenario 1: Employee Did Not Take All Leave
An employee with 28 days' entitlement (including bank holidays) has 5 days remaining at year end. They simply chose not to take it.
Position: The employer can legitimately forfeit the 1.6 weeks (8 days) of Regulation 13A leave if their policy states use-it-or-lose-it. However, for the Regulation 13 leave (20 days), the employer must be able to show they:
- Informed the employee of their entitlement
- Encouraged them to take their leave
- Warned them that untaken leave would be lost
- Provided a genuine opportunity to take the leave
If the employer cannot demonstrate these steps, the Regulation 13 leave carries over.
Scenario 2: Employee on Long-Term Sick Leave
An employee has been off sick for 8 months and could not take their annual leave.
Position: The employee is entitled to carry over their 4-week Regulation 13 entitlement. They should take this leave within 18 months of the end of the leave year in which it accrued (following the Plumb v Duncan Print Group ruling). The 1.6-week Regulation 13A entitlement is subject to the employer's policy.
Scenario 3: Employee on Maternity Leave
An employee is on maternity leave during the period when they would normally take annual leave.
Position: Statutory holiday continues to accrue throughout maternity leave (both ordinary and additional). Since the employee cannot take annual leave simultaneously with maternity leave, any accrued but untaken leave must be allowed to carry over. Most employers allow the employee to take it immediately before or after maternity leave.
Scenario 4: Employer Refused Leave Requests
An employee requested leave on two occasions and both were refused due to business needs. They now have untaken days at year end.
Position: If the employer refused reasonable requests and did not provide alternative dates, the leave carries over. The employer's failure to facilitate leave-taking means the employee retains the right to it.
Writing a Carry-Over Policy
Essential Elements
Your carry-over policy should address:
- How many days can be carried over: Specify the maximum (e.g. 5 days or one week)
- By when must carried-over leave be taken: Set a deadline (e.g. by 31 March of the following year)
- The request process: How employees request to carry over leave
- Manager approval: Whether carry-over requires manager approval
- Exceptions: Circumstances where additional carry-over is allowed (sickness, maternity, operational refusal)
- Forfeiture warning: Clear statement that leave not taken by the deadline will be lost (subject to legal protections)
Sample Policy Wording
"Employees may carry over up to 5 days of unused annual leave into the following leave year, subject to manager approval. Carried-over leave must be taken by 31 March. Any carried-over leave not taken by this date will be forfeited, except where the employee was unable to take it due to sickness, maternity/paternity/adoption leave, or where the company was unable to accommodate a leave request. The company will make reasonable efforts to ensure all employees are able to take their full annual leave entitlement each year."
Common Employer Mistakes
Mistake 1: Blanket Use-It-or-Lose-It Policies
A policy that simply states all untaken leave is forfeited at year end is likely unlawful for the Regulation 13 entitlement. You must actively encourage employees to take their leave and warn them of the consequences.
Mistake 2: Not Distinguishing Between Leave Types
Treating all 5.6 weeks identically creates confusion. Your policy should recognise the different rules for Regulation 13, Regulation 13A, and contractual leave.
Mistake 3: Ignoring Accrual During Absence
Forgetting that holiday accrues during sickness and maternity leave leads to employees returning with significant untaken entitlement that should have been planned for.
Mistake 4: No Proactive Management
Waiting until the end of the leave year to address untaken leave is too late. Monitor leave balances quarterly and prompt employees who are behind on their entitlement.
How Grove HR Manages Carry-Over
Grove HR handles carry-over automatically based on your configured policy:
- Configurable carry-over limits per leave type
- Automatic reminders to employees with high unused balances
- Manager dashboards showing team leave usage and carry-over projections
- Expiry tracking for carried-over days
- Audit trail documenting that employees were informed and encouraged to take leave
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The Grove Team
Grove HR
The Grove Team writes about HR best practices, compliance, and workplace culture for Grove. Helping UK businesses cultivate thriving teams.
