How do we deal with holiday for those on furlough leave?

HMRC updated their guidance for employees’ and have provided much-needed clarity on how to deal with annual leave periods whilst someone is on furlough leave.

We know that holiday entitlement continues to accrue whilst on furlough leave and that there has been an amendment to the Working Time Regulations to enable the first 20 days’ holiday to be carried into the next two leave years if it cannot be taken during this leave year as a result of coronavirus.

How should pre-booked holidays, or bank holidays be dealt with during this period?

The first thing to remember is that under the law there is no “right” to take the bank holidays as annual leave – the right is only for full-time workers to have a minimum of 28 days’ annual leave in any leave year (with 8 of those days typically being assigned to the bank holidays).

Whether you need to assign the upcoming bank holidays as annual leave or whether they can be taken at a later date will depend on the terms of the individual contract, and we would recommend taking legal advice on your specific situation.

Employers are able to require their workers to take holiday and can cancel a worker’s holiday if they give enough notice.

The required notice periods are:

• double the length of the holiday if the employer wishes to require a worker to take holiday on particular days. For example, if an employer wishes a worker to take one week as holiday, they must give at least two weeks’ notice.
• if the employer wants to cancel a planned holiday then the notice must be at least the length of the planned holiday. For example, if an employer wants to cancel one-week pre-booked holiday they must give at least one week notice of that.

ACAS has updated its guidance on annual leave whilst on furlough which suggests that furlough and annual leave are not mutually exclusive.

The prevailing view of ACAS and the government is that workers will be able to take annual leave (or be able to be told to take annual leave by employers) during the furlough leave period without it interrupting the furlough period. However, government guidance makes it clear that if “an employer requires a worker to take holiday while on furlough, 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.”

The ACAS guidance also states that workers should be paid 100% for any days assigned as holiday.

HMRC updated their guidance on 13 May 2020 (see more information here) and has confirmed ACAS’s view. Workers on furlough are able to take annual leave and should be paid their normal salary (i.e. 100%) of their salary) for days spent on annual leave. Employers are able to claim 80% of salary paid on holiday days.

You can find the ACAS guidance here.

What are the health and safety considerations?

The government’s guidance updated on 13 May 2020 confirms that:

“If an employer requires a worker to take holiday while on furlough, 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.”

This should be considered if you are planning on telling your employees when to take holiday.

Further advice

We would strongly recommend that you take legal advice on your particular circumstances, and please feel free to contact one of the Ashtons Legal Employment team for support.

This information is correct at 10.30am on 21 May 2020.