The Coronavirus pandemic is an unprecedented situation, which has seen many employees being placed on furlough. This has led some employees to stockpile holiday entitlement.
Almost all workers who work a five-day week currently receive 28 days of statutory leave entitlement inclusive of bank holidays. This entitlement is not normally transferable between leave years.
New holiday provisions
The Government has passed new emergency legislation allowing workers to carry forward, for two years, up to four weeks of unused leave the Coronavirus outbreak prevented them from taking. This eases the requirements on businesses to ensure that workers take the statutory amount of annual leave in one year. These amendments to the Working Time Regulations 1998 apply to all employees, including agency workers, and some casual and zero-hours contract workers. Financial penalties for employers who do not ensure that workers take their statutory entitlement in one year are also lifted.
Payments in lieu of holiday are usually disallowed unless the worker is leaving the employer, this has also been changed.
However, just because this legislation has been passed does not mean that it will happen in this way. The normal annual leave provisions are still in place and employers must still take all reasonable measures to allow an employee to take their allocated leave, These changes are for those workers that have been unable to take their leave due to the fact that they have needed to work during this crisis period.
Options for furloughed employees
Employers can require workers to take holiday as long as they give them twice as many days’ notice as the period of leave the worker is required to take, or whatever is outlined in their employment contract. Employers are recommended to seek their employee’s agreement to this arrangement, as this will come at a time where employees are unable to travel freely due to lockdown measures. Employees may be happy to agree to this arrangement as it would mean that the employee would be entitled to full pay for the period of annual leave.
This set of rules would apply equally to those employees who have not been furloughed.
Holiday allowance above the statutory amount continues to accrue during furlough
If an employee is contractually entitled to more than the statutory amount (i.e. a business offers more than the 28 days statutory amount) then employers can ask employees to agree that leave above the statutory amount does not accrue during the period of furlough, however, this must be agreed and confirmed in writing by both parties.
Without such an agreement, the employee still accrues annual leave at the rate of their contractual entitlement.
Topping up furlough pay using holiday
The Government guidance does not address if furloughed workers can use holiday to top up their 80 per cent salary pay. If holiday is taken during a furlough period employers should top up the holiday pay to the full normal salary amount. Employers can also claim 80 per cent of the holiday pay through the furlough grant in the same way as regular salary.
Employees who are worried about a drop in income may propose taking holiday on set dates on full pay. They may only agree to being furloughed before or after some leave on full salary for the holiday part of the period.
Employers who are not in a financial position to pay furloughed employees in full during annual leave can refuse employees’ requests for holiday in what would otherwise be a furlough period. The employer must give the normal notice which is as much notice of a refusal as the amount of leave requested, so two weeks’ notice if the leave requested was for two weeks.
The information provided in this article is for general information purposes and does not constitute legal advice. Whilst the material is valid at the time of publication, changes in circumstances may impact the accuracy and validity of the information. It is therefore suggested that you consult with the Government website for the very latest information or speak with an HR adviser on the HR member legal helpline.
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