Furlough and Holiday Leave

Since the Coronavirus Job Retention Scheme was introduced in March there has been a great deal of uncertainty and debate over the position in respect of holiday leave for furloughed employees.

The earlier Government guidance was silent on a number of issues and left many questions unanswered. The Government has published new guidance entitled “Holiday entitlement and pay during coronavirus – Covid-19”.  This thankfully clarifies a number of issues.  The full guidance can be found at:-

https://www.gov.uk/guidance/holiday-entitlement-and-pay-during-coronavirus-covid-19

The key points to bear in mind are:-

Accrual of holiday

Furloughed employees continue to accrue holiday leave during the furlough period. They accrue both their statutory holiday (5.6 weeks) and any additional contractual holiday.

Entitlement to take holiday

Furloughed employees are entitled to take holiday leave during the furlough period – this does not disrupt the furlough.

Requiring employees to take holiday during furlough

• Employers can require furloughed employees to take holiday leave during the furlough period, or to cancel pre-booked holiday. But an employer must give the employee sufficient notice of this requirement.
• The notice that should be given is double the length of the holiday the employer requires the employee to take. For example, if you require an employee to take 5 days holiday, they need to give the employee at least  10 days notice before the first day on which you want the holiday to begin.  Notice periods can be varied by agreement between the employer and the employee.
• The guidance states that employers should engage with their workforce. To explain the reasons for wanting them to take leave before requiring them to do so. The guidance  goes on to state that ‘the employer should consider whether any restrictions the worker is under, such as the need to socially distance or self-isolate, would prevent the worker from resting, relaxing and enjoying leisure time which is the fundamental purpose of holiday’.

Holiday pay

Employees should be paid their normal pay (pre-furlough pay) for any holiday leave. Accordingly, if an employee is only receiving 80% of their pay during their furlough period,  the employer will have to top this up to 100% of the employees usual wage for the holiday leave period.   The employees usual wage is calculated in the normal way under the Working Time Regulations 1998.

Bank holidays

In respect of bank holidays, if the furloughed employee would usually have the bank holiday as a holiday then there are two options:-

• The bank holiday is taken as annual leave (and the employer tops up the pay) or
• The employee is given a day off in lieu instead to take at a later date.

Carrying over holiday

• The Government has passed new temporary legislation – The Working Time Coronavirus (Amendment) Regulations 2020. This allows employees to carry over up to 4 weeks of their statutory annual leave if it is not reasonably practicable for the employee to take some or all of this holiday, as a result of the effects of coronavirus.  The guidance gives examples of when it might not be reasonably practicable for an employee to take their holiday during the current holiday year.
• The right to carry forward holiday leave applies to all employees. Not just those who have been furloughed.
• The guidance suggests that furloughed employees should not need to carry over holiday. As they could take holiday during their furlough period. This is slightly at odds with what they say earlier in the guidance about employers, considering whether employees would be able to rest, relax and enjoy their holiday whilst furloughed.

Word of caution

The provisions relating to carrying forward holiday is law. However, the government guidance is just guidance, it is not binding but it is of course good practise to follow that.

We advise both employers and employees.  If you would like employment advice regarding the Scheme or any other employment issue please do not hesitate to contact us to arrange a telephone/video appointment.

Please note the above is for information purposes only and is intended to be a short summary.  It should not be treated as a comprehensive guide and should not be acted on without qualified legal advice.

Get in touch

Hart Reade are here to help you in Eastbourne, Meads, Hailsham and Polegate.  All departments are fully operational and ready to progress matters quickly.  We can you practical advice on any matters relating to employment.

If you would like to get in touch with one of our Employment Solicitors, then please call 01323 727321. Or alternatively, please fill in the form below and someone will be in touch.

Author: Jacqueline Penfold. Litigation and Employment, Partner