The UK government has published an update on workers’ entitlement to holiday and holiday pay during the coronavirus pandemic with some further clarity on whether an employer can require a worker to take holiday whilst on furlough. Whilst the guidance is not legally binding, it does set out the government’s view on some legal issues and best practice.
The guidance is directed at workers’ statutory 5.6 weeks’ annual leave entitlement and sets out the following advice:
- Accrual: Statutory holiday entitlement and any additional contractually agreed holiday will continue to accrue during furlough.
- Requirement to take/cancel holiday: Employers can require workers to take and cancel holiday subject to the usual notice requirements. Taking annual leave will not disrupt furlough but employers should explain why they want the leave to be taken before they impose it. The guidance adds however that the employer needs to consider whether any restrictions that the worker is under, such as the need to social distance or self-isolate, would prevent the worker from resting, relaxing and enjoying leisure time, which is the fundamental purpose of holiday. In most cases, there is a good argument that furloughed employees who are not sick can rest, relax and enjoy leisure time – at least where they are not required to self-isolate. However, as is often the case, the position is not beyond doubt and will be subject to appeal by individuals if forced down that route.
- Holiday pay: Pay for statutory holiday during furlough should follow the general principle that workers are paid what they would have earned if they had been working. Therefore, employers that are only paying workers the 80% government furlough grant need to top up holiday pay to the correct amount.
- Bank holidays: Where a bank holiday falls inside a furlough period and the worker would usually have worked the bank holiday, their furlough will be unaffected by the bank holiday. However, if the worker would usually have had the bank holiday as holiday, the employer can either require them to take it as holiday (subject to any applicable notice requirements) or agree with the worker to defer it to a later date. The bank holiday or the day in lieu should be paid at the correct holiday pay rate.
- Carry forward: The guidance states that employers should do everything reasonably practicable to ensure that the worker is able to take as much of their annual leave as possible in the year to which it relates. The guidance here provides a range of examples and scenarios, but in summary, as furloughed workers can take holiday whilst furloughed, they will not generally be entitled to carry forward their four weeks. European law derived holiday entitlement to the following two leave years (following the recent amendments to the Working Time Regulations). However, if the employer is unable to fund the difference between furlough and holiday pay, it is likely that this would make it not reasonably practicable for the worker to take their leave, enabling the worker to carry their annual leave forward. Again this needs to be negotiated on a case by case basis.
To discuss your own situation contact Stephen McConnell, Business Services Partner Email: stephenmcconnell@bakertillymm.co.uk Tel: 028 9032 3466