Employer restricting holiday carry over

This is a question that comes up frequently and the answer depends on the specific circumstances, so let me walk through the legal framework and practical position.

Statutory entitlement:

Under the Working Time Regulations 1998, all workers are entitled to 5.6 weeks of paid annual leave per year, which for a full-time worker equates to 28 days including bank holidays. This is the statutory minimum.

The basic rule on carry-over:

The default position under regulation 13 is that the basic 4 weeks of leave derived from the EU Working Time Directive cannot normally be carried over to the next leave year. The additional 1.6 weeks under regulation 13A also cannot normally be carried over unless the employer's contract or policy allows it.

So on the face of the Regulations, your employer is generally entitled to say "use it or lose it" in relation to untaken holiday.

Important exceptions where carry-over is required:

There are several situations where the law overrides the default position and your employer cannot prevent carry-over.

1. Sickness absence. If you were unable to take your leave because you were off sick, you can carry over up to 4 weeks of untaken statutory leave. This was established following the NHS Leeds v Larner line of cases and is now reflected in the Regulations.

2. Maternity, adoption, or other family-related leave. If you could not take holiday because you were on statutory maternity or similar leave, carry-over is permitted.

3. Employer prevented you from taking leave. This is a significant development. Following the Court of Appeal decision in Smith v Pimlico Plumbers and the earlier European case of Max-Planck-Gesellschaft, if your employer did not actively enable you to take your leave, or discouraged you from doing so, or failed to give you a reasonable opportunity to take it, then the leave must be carried over. The employer bears a burden to show it took steps to encourage the worker to take the leave and warned them it would be lost if not taken.

4. Working Time (Amendment) Regulations 2023. From 1 January 2024, these Regulations introduced changes consolidating some of these principles into domestic law, including carry-over rights for sick leave and family leave situations, and confirmed the position on irregular hours and part-year workers. It is important to check whether any of these provisions apply to your situation.

Contractual entitlement:

Many employers offer more than the statutory minimum of 28 days. Any leave above the statutory minimum is governed entirely by the terms of your contract and your employer's holiday policy. If the contract or policy says additional days cannot be carried over, that is generally enforceable. If it says they can, then the employer should honour that.

Practical considerations:

Check your contract of employment and any staff handbook or holiday policy to see what it says about carry-over. Note whether the leave you want to carry over falls within the statutory 28 days or is contractual leave above that.

If you believe you were prevented from taking leave, for example because of workload pressure, refused requests, or understaffing, make a written record of that. An employer who effectively blocks you from taking leave and then refuses carry-over is on weak legal ground following the case law mentioned above.

If your employer is refusing carry-over and you think one of the exceptions applies, raise it in writing, setting out why you believe you are entitled to carry the leave over.

If you cannot resolve it informally, a claim can be brought in the employment tribunal for failure to allow paid annual leave, but you would need to act promptly as time limits are generally three months less one day from the date of the act complained of, with ACAS early conciliation extending the deadline.

Summary:

Your employer can stop you carrying over unused holiday in many routine situations, but the law protects you where you were genuinely unable to take the leave due to sickness, family leave, or because the employer itself failed to facilitate and encourage you to take it. The specific facts matter a great deal here, so it is worth looking carefully at why the leave went untaken and what your contract says.