What Happens If I Don’t Use All My Holiday Entitlement in the UK?

In England and Wales, employees are legally entitled to a certain number of paid holiday days per year. Using annual leave is crucial to maintaining a work-life balance, but sometimes, employees reach the end of the year without using their full holiday entitlement. 

Many employees may not understand their rights regarding time off, including whether they can carry over unused days. 

This article explains how employment law operates in this area, including what happens to unused holidays and what to do if your employer denies a request for time off. For further advice, contact Helix Law. 

What Happens To Unused Annual Leave?

If you fail to use all your annual leave, whether you can carry this over to the following year will depend on your employer’s policies and/or your employment contract. There’s no legal requirement for a holiday transfer, but some employers are more flexible. 

Carrying Over Leave into the Next Year

Generally, employers expect their staff to use their full entitlement within the year. However, in some situations, employees may carry over unused days. You should check your workplace policy to confirm, but common reasons for allowing a holiday transfer are:

• Sickness: If you couldn’t take all your holiday due to illness, you may be able to carry it over. 
• Failure to Inform Employees: Employers must legally ensure their workers know their entitlement. Therefore, if they fail to notify them of their rights, employees may be able to transfer days to the following year. 
• Additional Holiday: Some companies provide leave beyond the statutory requirements, in which case employees should check their specific policies regarding using unused additional days off. 

Employer Policies on Unused Leave

Employers have different policies regarding whether their staff can benefit from unused holidays. Some companies allow employees to carry over a limited number of days, while others implement ‘use it or lose it’ policies. 

Companies that offer over the statutory minimum have discretion regarding how they treat the additional entitlement. Some also allow their staff to purchase or sell holiday days so they can convert their leave into extra pay or give up a portion of their salary for more time off. 

Exceptions 

In some situations, an employer must allow an employee to carry over unused time off, regardless of what their policies state:

• Long-Term Sickness: Employees who take time off due to long-term sickness can carry over up to four weeks of unused leave, which they must use within 18 months.
• Maternity or Paternity Leave: A staff member who takes parental leave must be allowed to transfer any holiday they don’t take to the following year. 
• Failure to Allow Leave: An employee can carry over a maximum of 4 weeks’ holiday if their company doesn’t allow or encourage them to take annual leave. This also applies if the employer fails to inform them that they will lose unused days. 

What Is the ‘Use It or Lose It’ Policy?

Many companies implement ‘use it or lose it’ policies, meaning staff must take their full holiday entitlement within the year, or they lose it. 

Do You Lose Your Holidays if You Don’t Use Them?

Employers are entitled to enforce such policies. Therefore, if your company abides by the ‘use it or lose it’ rule, you will lose any unused days off unless otherwise agreed with your employer. 

It’s important to note any failure by your employer to inform you of your holiday rights or any attempt to discourage you from taking time off. They are legally responsible for making you aware of your entitlement, and you may be able to claim compensation or transfer your days if they fail to comply with this duty. 

Paid Holidays in the UK: What the Law Says

The relevant law in England and Wales which governs holidays is the Working Time Regulations 1998. The Regulations state:

• All full-time employees are entitled to a minimum of 28 days (or 5.6 weeks) paid holiday per year. 
• The 28-day allowance includes bank holidays, but employees don’t necessarily have to take those days off. 
• The Regulations apply to all ‘workers’, including agency workers, those with irregular hours, and part-year workers. 
• While on annual leave, employees must receive their ‘normal’ pay, which includes considering commission and bonuses. 
• Part-time workers receive their holidays ‘pro rata’. For example, if someone works four days a week, they are entitled to 22.4 days (4 x 5.6). 

What if My Employer Denies My Holiday Request?

An employer has the right to refuse an annual leave request, but they must provide a good business reason and give the employee the same notice they require for asking for holiday (e.g., a week). For example, staff shortages and busy periods may justify denying a request. 

However, companies must still encourage employees to take time off, so persistent refusals could amount to a breach of contract. If you’re concerned that your employer keeps denying your requests, you should:

• Check your contract and company policy to ensure you’re complying with your obligations regarding requesting time off. 
• Raise your concerns with HR or management to see if you can resolve the matter informally. 
• File a formal grievance in writing if it cannot be resolved. 
• Speak to a solicitor if the issue persists and your company continues to refuse you leave unreasonably.

Frequently Asked Questions

Can I Get Paid for Unused Holidays?

Whether you receive payment for unused annual leave depends on your employer’s policies. Employees can generally only take payment in lieu of holiday when they leave their job and have unused days left over. Companies offering additional days off may also allow payment for outstanding leave, but this is discretionary. 

Do I Have to Take All My Holiday Entitlements?

Yes, generally you should take all your holiday within the leave year. The statutory minimum is there for a reason, and your employer should also encourage you to use your full entitlement. Failing to take time off could result in losing days off, mainly if your company follows the ‘use it or lose it’ policy. 

Final Thoughts

Understanding your holiday entitlement is essential to ensuring you take the rest you are legally entitled to and maintain a work-life balance. While some employers allow staff to carry over unused days, many implement a ‘use it or lose it’ policy, meaning it’s essential that employees take their full entitlement within the year. If you’re unsure about your holiday rights or believe your company may be acting unlawfully, our expert solicitors at Helix Law can help. Contact us today for legal guidance and to ensure your rights are protected.