Holidays and Covid
Sentient Group Ltd
Info Update 2020/26                                                         Issue Date: 14/05/2020
Holidays & Covid-19
New guidance came out on 13th May relating to the question of annual leave and holiday pay during the Covid 19 outbreak.
It is useful in that it clarifies that:
  • Holiday will continue to accrue over a period of furlough
  • Employees can take holiday when on furlough leave without disrupting furlough
  • How Holiday pay should be calculated
  • Employers can require employees to take some annual leave.
  • The right to carry forward holiday if this could not be taken because of COVID-19.

Requiring an employee to take leave
Workers on furlough can take holiday without disrupting their furlough. The notice requirements for their employer requiring a worker to take leave or to refuse a request for leave continue to apply. Employers should engage with their workforce and explain reasons for wanting them to take leave before requiring them to do so.
Importantly, 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. We think this will be an interesting area for debate in the weeks and months to come!
Bank/Public Holidays
Where a bank holiday falls during a period of furlough and the worker would have usually worked the bank holiday, their furlough will be unaffected by the bank holiday.
However, if the worker would usually have had the bank holiday as annual leave, there are 2 options.
- The bank holiday is taken as annual leave
If the employer and the worker agree that the bank holiday can be taken as annual leave while on furlough, the employer must pay the correct holiday pay for the worker. Employers may also require workers to take the bank holiday as annual leave with the correct notice periods.
 - The bank holiday is deferred
If the employer and the worker agree that the bank holiday will not be taken as annual leave at that time, the worker must still receive the day of annual leave that they would have received. This holiday can be deferred till a later date, but the worker should still receive their full holiday entitlement.
Holiday Pay
If a worker on furlough takes annual leave employers must calculate and pay the correct holiday pay in accordance with current legislation. Where this calculated rate 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.
Carrying leave forwards: how new legislation has changed the rules
We are all aware of the rules relating to carry of annual leave in that generally only 1.6 weeks of annual leave can be carried over into the following leave year if a written agreement exists to allow this.
The government has passed new emergency legislation to ensure businesses have the flexibility they need to respond to the coronavirus pandemic and to protect workers from losing their statutory holiday entitlement (The Working Time (Coronavirus) (Amendment) Regulations 2020, laid before Parliament on 27 March 2020). These regulations enable workers to carry holiday forward where the impact of coronavirus means that it has not been reasonably practicable to take it in the leave year to which it relates.
Where it has not been reasonably practicable for the worker to take some or all of the 4 weeks’ holiday due to the effects of coronavirus, the untaken amount may be carried forward into the following 2 leave years. 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 guidance goes on to suggest that furloughed workers are unlikely to need to carry forward statutory annual leave, as they will be able to take it during the furlough period! However, If, due to the impact of coronavirus on operations, the employer is unable to fund the difference, or there are restrictions which prevent the worker from resting, relaxing or enjoying leisure time (due to the need to socially distance or self-isolate) it is likely that this would make it not reasonably practicable for the worker to take their leave, enabling the worker to carry their annual leave forwards.
The Guidance is detailed and provides some useful examples and is an example of the steady drip of information that seeks to clarify the situation for employers. As ever we will keep you informed as soon as new information comes to light. 
The advice and comment in this update is not meant to be an authoritative statement of the law. The articles and summaries should not be applied to any specific set of facts and circumstances without seeking further advice. Whilst every care is taken to ensure that the content is correct Sentient cannot accept responsibility for the accuracy of statements made nor the result of any actions taken by individuals after reading such.
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