The General Rule and Statutory Carry-Over
Under the Working Time Regulations 1998 (WTR 1998), workers in the United Kingdom are entitled to a statutory minimum of 5.6 weeks of paid annual leave per year. This entitlement is split into two distinct tiers:
- Regulation 13 Leave (4 weeks / 20 days for a full-time worker): Deriving from the EU Working Time Directive 2003/88/EC, this basic leave must generally be taken within the relevant leave year and cannot be replaced by a payment in lieu (except upon termination of employment).
- Regulation 13A Additional Leave (1.6 weeks / 8 days for a full-time worker): This domestic UK statutory extension (which often accounts for UK public and bank holidays) may be carried over into the following leave year only where there is an express agreement between the employer and the worker (such as in the employment contract or a relevant workforce agreement).
As a general principle, "use-it-or-lose-it" applies to untaken leave at the end of the leave year, unless statutory exceptions, long-term absence, or contractual terms apply.
Employer Duty to Facilitate Leave and Inform Workers
Following landmark rulings by the Court of Justice of the European Union (CJEU) (including Kreuziger v Land Berlin [C-619/16] and Max-Planck-Gesellschaft v Shimizu [C-684/16]) and the UK Court of Appeal in Smith v Pimlico Plumbers Ltd [2022] EWCA Civ 70, untaken leave will not lapse if the employer failed to give the worker an effective opportunity to take their leave.
Codified in UK statutory law under the Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023, untaken Regulation 13 leave carries over into subsequent leave years if the employer:
- Failed to recognise the worker's right to paid statutory annual leave;
- Failed to encourage the worker to take their leave entitlement; or
- Failed to inform the worker that any untaken leave would be lost at the end of the leave year.
Where an employer fails to meet these notice and facilitation obligations, the right to take the leave persists and carries over indefinitely until the end of the first full leave year in which the employer remedies the failure, or accumulates until the termination of employment.
Long-Term Sickness Absence and Carry-Over Limits
Workers who are unable to take their statutory annual leave due to incapacity or sickness absence retain the right to carry over their leave:
- Regulation 13 Leave (4 weeks): Workers can carry over untaken Regulation 13 leave into the subsequent leave year if sickness prevented them from taking it. In line with established precedent (KHS AG v Schulte [C-214/10]), this carry-over is subject to a 18-month forfeiture cap (or 15 months under relevant domestic provisions from the end of the leave year in which it accrued). Untaken leave beyond this window is permanently extinguished.
- Regulation 13A Leave (1.6 weeks): Does not automatically carry over due to sickness unless permitted under the employment contract or a collective agreement.
Additionally, workers unable to take leave due to statutory family-related leave (such as maternity, adoption, paternity, or shared parental leave) are entitled to carry over their entire untaken statutory entitlement (both Regulation 13 and 13A) into the following leave year.
Practical Implications for HR and Employers
To ensure statutory compliance and avoid the accumulation of unexpired leave liabilities across multiple tax and holiday years, employers should:
- Issue written annual leave balance statements to workers, particularly midway through the leave year and in the autumn ahead of year-end deadlines;
- Remind workers in writing of the date when their leave year expires and explicitly warn that untaken leave will forfeit;
- Ensure that accurate digital time tracking and absence management systems maintain an auditable record of notifications, holiday balances, and employee leave requests.
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