The Government has published guidance on workers’ entitlement to holiday and holiday pay during the COVID-19 pandemic and it applies to workers who have been furloughed under the Coronavirus Job Retention Scheme (CJRS), as well as those who continue to work as previously. This is an area in which there has been a degree of uncertainty and therefore whilst the guidance is very welcome, it must be noted that as it is only guidance then it is not legally binding.
Holiday entitlement
In terms of holiday entitlement, the guidance states that furloughed workers should continue to accrue entitlement to annual leave under the Working Time Regulations 1998 and that anyone who is furloughed can take holiday without bringing the period of furlough to an end.
Whilst employers can require workers to take holiday while on furlough (an issue that has been the subject of some legal debate), the guidance says: “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 recent partial lifting of the lockdown may well make the employers request more reasonable.
The guidance reiterates that, under the Working Time (Coronavirus) (Amendment) Regulations 2020, where it has not been reasonably practicable for a worker to take some or all of the basic four weeks’ annual leave due to the pandemic, the right exists for the untaken amount to be carried forward into the following two leave years. It goes on to outline the factors that employers should take into account when determining whether it was reasonably practicable for a worker to take leave:
- whether the business has faced a significant increase in demand due to coronavirus that would reasonably require the worker to continue to be at work and cannot be met through alternative practical measures
- the extent to which the business’s workforce is disrupted by the coronavirus and the practical options available to the business to provide temporary cover of essential activities
- the health of the worker and how soon he or she needs to take a period of rest and relaxation
- the length of time remaining in the worker’s leave year, to enable the worker to take holiday at a later date within the leave year
- the extent to which the worker taking leave would impact on wider society’s response to, and recovery from, the coronavirus situation
- the ability of the remainder of the available workforce to provide cover for the worker going on leave.
Employers are urged to do everything reasonably practicable to allow workers to take as much leave as possible in the year to which it relates. As best practice, where leave is carried forward, workers should be given the opportunity to take holiday at the earliest practicable opportunity.
The guidance notes that the need for furloughed workers to carry forward statutory annual leave is unlikely, as it can be taken during the furlough period, provided that their employer pays the correct rate of holiday pay. However, if the financial impact of the pandemic means that the difference between furlough pay and holiday pay cannot be funded by the employer, a ‘reasonably practicable’ scenario is unlikely to exist. Therefore, it’s likely that a worker would be able to carry the annual leave forward under the Regulations.
Holiday pay
The guidance states that holiday pay during furlough must be ‘the correct holiday pay in accordance with current legislation’, which is based on normal remuneration. If the calculated rate exceeds the furlough rate of pay, the employer must pay the difference but can claim up to 80% (or £2,500 per month) under the CJRS.
As always, if you are struggling with any of these issues or would like to discuss an employment law issue, then please do not hesitate to get in touch with the team.
