How your holiday entitlement at work is affected during the coronavirus pandemic

We might not be jetting off on holidays abroad (or even in the UK for that matter!) any time soon, but annual leave is an important part of our work-life balance, ensuring time for rest and relaxation away from the work environment. However, at the moment many businesses and staff are under immense pressure, especially those in key worker roles and industries, and taking annual leave can become an issue. To assist businesses and workers at this time, the Government has issued guidance for employers detailing how holiday entitlement and pay operate during the coronavirus pandemic. The guidance is for employees and workers who continue to work or have been placed on furlough as part of the government’s Coronavirus Job Retention Scheme (CJRS). Although the guidance has no legal effect and tribunals will not be required to follow it when making decisions about working time and holiday cases, it does provide more detail and guidance for employers than previously available. Employers, employees and workers are encouraged to be as flexible as they can about holiday during the coronavirus pandemic. The Government advises employers and workers to check individual contracts and if necessary seek independent legal advice for further guidance.

Holiday Entitlement

Most workers, including zero-hour contracted workers and those on irregular hours contracts, are legally entitled to 5.6 weeks’ paid holiday per year. The exception is those who are genuinely self-employed. You can use the government holiday entitlement calculator to calculate a worker’s statutory holiday entitlement. The guidance outlines two key points for furloughed workers:

• Workers continue to accrue statutory and any additional holiday provided under their employment contract whilst on furlough leave.
• Workers or employees can take holiday without disrupting their furlough.

Taking Holiday

Both furloughed workers or those that are still working are able to request holiday in the way they normally would, under usual notice requirements. Employers are able to accept or reject a request as before. Employers are also able to require that workers take holiday or cancel their holiday provided the correct notice period is given, however, employers are advised to engage with their workforce and explain reasons for wanting them to take leave before requiring them to do so. The required notice periods are:

• Double the length of the holiday if the employer requires a worker to take holiday on particular days.
• The length of the planned holiday if the employer wishes to cancel a worker’s holiday or require the worker not to take holiday on particular dates.

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. 

Bank holidays for furloughed workers

If bank holidays are usually included as part of a workers’ statutory holiday entitlement and the worker would usually have had the bank holiday as annual leave, there are 2 options for bank holidays that fall whilst workers are on furlough leave:

• The bank holiday is taken as annual leave and the correct holiday pay must be paid.
• The bank holiday is deferred until a later date.

Where the worker would have usually worked the bank holiday that falls within their period of furlough, their furlough will be unaffected by the bank holiday. It is worth pointing out that there is no statutory right to time off for bank holidays, so although many employers include bank holidays as part of a workers’ statutory holiday entitlement they do not have to. In addition, employers can require workers who would usually take bank holidays as holiday to work instead, using the standard notice periods, however, employers must still ensure that workers receive their statutory holiday entitlement for the year.

Holiday Pay

Holiday pay, whether the worker is on furlough or not, should be calculated in line with current legislation and should be based on a worker’s usual earnings. If this is above the pay the worker receives while on furlough, the employer must pay the difference. However, as taking holiday does not break the furlough period, the employer can continue to claim the 80% grant from the government to cover most of the cost of holiday pay.

Unused annual leave

In March we shared a Government update regarding new emergency legislation which allows employers to permit workers to carry over up to 4 weeks of unused holiday into the next two leave years. This is to protect workers from losing their statutory holiday entitlement and to ensure businesses have the flexibility they need at this time, but is not a right of the employee to choose to defer annual leave to subsequent annual leave years. The regulations enable employers to allow workers to carry holiday forward into the following 2 leave years where the impact of coronavirus means that it has not been reasonably practicable to take it in the leave year to which it relates. To decide whether it has been reasonably practicable an employer should consider:

• 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’ 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 they need 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

For examples of what is deemed reasonably practicable, click here to read the advice in full. When calculating how much holiday a worker can carry forwards, employers must give workers the opportunity to take any leave that they cannot carry forward before the end of the leave year. The Government advises that workers who are on furlough are unlikely to need to carry forward statutory annual leave, as in most cases, they will be able to take it during the furlough period.

Further information and advice

Government guidance is available to read in full here. The guidance also includes details for handling leave that has been carried forward and advice for furloughed agency workers. ACAS has also issued further advice and guidance for employers and employees regarding using holiday during the coronavirus pandemic.