Can you take annual leave during Covid-19?

Following the Easter Bank Holiday weekend many employees are wondering if they can take holiday during Covid-19. Guidance published by HRMC on the Coronavirus Job Retention Scheme does not mention how a period of furlough interacts with annual leave. Further government guidance is required on whether or not a furloughed employee can take annual leave while remaining on furlough, and, if they can, how their holiday pay should be calculated.

ACAS guidance on using holiday during the coronavirus (COVID-19) crisis states that furloughed employees can still request and take their holiday in the usual way.

Assuming that this is correct, and employees can take annual leave at the same time as a period of furlough, the safest option for employers is to pay employees their normal pay for a period of holiday, rather than any reduced amount they receive during the furlough. It seems likely that an employee’s normal weekly pay for these purposes would be based on their pre-furlough normal working hours (as they do not have any working hours during the furlough).

If, however you’re not, as a Company in a financial position to pay employees in full for annual leave taken during furlough leave you can refuse any requests for annual leave during the furlough period by giving the required notice. 

The Government has amended reg.13 of the Working Time Regulations 1998 (SI 1998/1833)to allow workers to carry over up to four weeks’ annual leave into the next two holiday years, where it has not been reasonably practicable for them to take it as a result of the effects of Coronavirus. This will avoid the problem of large numbers of employees building up an excess of leave that has to be taken towards the end of the leave year.

It is not clear if an employer can require an employee to take annual leave during a period of furlough, by giving them the required notice (although the likely need to pay employees their normal weekly pay during a period of annual leave may mean this is an unattractive option for many employers in any event).

Until the position is clarified by government guidance, an employer that requires employees to use up their annual leave while they are furloughed risks a claim that they are in breach of the Working Time Regulations 1998. 

While there is case law to say that employees can be required to take annual leave at a time when they would not otherwise be working, it is not clear if the same principles would apply during furlough leave. Therefore, the safest option for employers is not to require employees to use their annual leave during furlough.

If an employer does wish employees to use their holiday while furloughed, it should seek their agreement to this, rather than imposing a period of annual leave on them. Employees in receipt of reduced pay may be happy to take annual leave while they are furloughed, if this would be on full pay.

Where bank holidays are included in an employee’s holiday entitlement under their contract, the safest option is either to pay the employee in full for bank holidays that fall during the period of furlough, or to allow the employee to take a day’s annual leave at a later date.

Where a furloughed employee is not entitled to bank holidays off under their contract, a bank holiday will have no effect on their pay during the furlough, or on their annual leave entitlement.

Finally, having time off is essential to rest, stay healthy and reduce staff burnout. Being flexible surrounding holiday requests during this current situation and gaining written consent of any updates or changes will help both employers and employees. Should you need more information on Furlough and Annual Leave, please have a read of our previous blog with all of the current Employment Law information here.

Should you have any further questions surrounding employment law, recruitment or any other HR issues, please don’t hesitate to get in touch with the Cluer HR team on 01386 751740 or email [email protected].

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