Furlough and Holiday

Posted on May 15, 2020
This week, the Government published its guidance on the thorny question of whether furloughed staff can take holiday, and whether employers can force them to take it.
Below I have set out the key points of the guidance, but we do have to warn you that legally it does still remain a knotty problem. This is just “guidance” from the Government – it is not enshrined in law, which it makes it a ripe old area for disputes.
So, the key points are:
  • This guidance applies to the statutory minimum of 5.6 weeks (or 28 days) for full time staff, which includes bank holidays;
  • Holiday continues to accrue during furlough (we knew that already);
  • Taking holiday does not “disrupt” furlough – in other words, it doesn’t break up the minimum 3 weeks you need to claim the grant under the CJRS;
  • Employers can ask staff to take or to cancel holiday by giving double the amount of notice than the requested holiday to be taken. They can ask employees to take it with less notice, but employees will need to consent.
  • BUT: the guidance does say that before you ask your staff to take some of their holiday during furlough, you need to think about whether there is anything to stop the worker from doing what they should be on holiday. No, I’m not talking about getting on a plane and jetting off to warmer climes. I mean, is there anything to stop them being able to relax and have a rest? The guidance uses the examples of an employee who is shielding or may even be sick so that they are not able to enjoy the purpose of being on holiday. Anyone who is on maternity leave or is on sickness absence will also not be able to take their holiday.
  • Bank holidays – this can either be taken in the normal way or you can give a day off in lieu. But either way, it should be paid in line with the usual rules on calculating holiday pay. Now we all know that these rules have changed massively over the years, so we’re back to looking at what an employee’s regular pay would be if they were at work and working. We would suggest then that this means that most employees will be entitled to their normal pay, not their furloughed rate because they should not be disadvantaged by not being at work.
  • Carrying forward untaken holiday into the next 2 holiday years – there are divided opinions on this. ACAS’ view is that anyone affected by the virus, including furloughed workers, should be permitted to carry over their holiday, whereas our view is that in fact this was designed to help out those workers who, due to the requirements of their job and their employer, were simply not able to take holiday. For example, delivery drivers, supermarket staff who may have had leave cancelled due to the demands for their business. The guidance sets out that it is all about whether it is “reasonably practicable” for an employee to take their holiday. Therefore, for a fit and well employee on furlough, but who is not self-isolating or shielding, there should be no barrier to their taking holiday in the current leave year. Please do read the guidance which is here.
In light of the extension of the CJRS (albeit on unknown terms for August to October at thee moment), these are some steps to take:
  • Look at your holiday year.
  • Consider whether you should ask people to take some holiday and if so how much.
  • Is there anyone you should not ask to take a holiday (ie you know they are shielding/self-isolating)?
  • Work out the cost to you – is it better to pay now, or will you be better off allowing carry over and paying over the next 2 years?
  • Above all, if you are going to force employees to take holiday, work hard on how you say it. Communications are so important right now. Employees will remember how they have been treated in this crisis when it comes to coming back to work!

And of course, if you need any guidance, please get in touch.