The Court of Justice of the European Union (CJEU) has given judgement in relation to 2 cases which have potentially important implications for workers and their right to carry forward annual leave into a new leave year.
Workers in the UK have an annual leave entitlement of 5.6 weeks but the judgement relates only to the 4 weeks of annual leave which flow from the Working Time Directive and which is incorporated into UK law by the Working Time Regulations 1998.
The CJEU makes it clear that employers should ensure that workers are encouraged to take their annual leave and are aware that failing to do so within the relevant period may result in the loss of that leave.
The practical implication is that if a worker ‘carries over’ leave into a new leave year and his or her employment is then terminated, he or she may have a right to claim a payment in lieu of the untaken holiday entitlement if their rights have not been adequately explained to them.
The best advice is for employers to ensure that they have a clear holiday policy explaining the potential loss of untaken entitlement at the end of the holiday year. Some sort of central diary system which can send out reminders to workers well in advance of the leave year is also good practice.
In summary, to avoid the risk of potential claims by workers for untaken leave entitlement employers should inform workers, accurately and in good time, of the risk of losing that leave at the end of the leave year, if it has not been taken.