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Annual Leave and Covid-19

View profile for Catherine Almeida
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This blog was last updated 9 April 2021.

Questions are being raised by both employers and employees on the rules around annual leave during the coronavirus pandemic. 

The new legislation explained:

Under the Working Time Regulations emergency legislation has been introduced to ensure employees are not losing their statutory holiday entitlements due to the pandemic. 

This legislation was introduced in March 2020, allowing annual leave to be carried forward and taken in the two leave years immediately following the leave year in respect of which it was due if it was not reasonably practical to be taken.  

The government has issued guidance on what reasonably practicable is:-

  • An increased demand on services provided due to coronavirus, which would mean the employee continues to work
  • The practicable options available to the business due to the extent of disruption to its workforce
  • The health of the employees, for example if they are shielding
  • The length remaining in the employees annual leave year
  • The impact the employee taking annual leave would have on the wider society’s response and recovery to the pandemic
  • The amount of employees able to cover

Employers have the responsibility to ensure employees take as much leave as possible in the pandemic if reasonably able to do so and  bearing in mind the above, any companies will be unable to allow employees to carry forward their holidays.

It is also not likely that furloughed employees would need to carry forward unused holiday years to the next holiday year, as they are able to use their annual leave whilst on furlough. 

The 4 weeks from the 5.6 weeks statutory requirement can be carried forward. The 1.6 weeks, which includes the bank/public holidays, can also be carried forward, however written agreement is needed between employee and employer.

Can furloughed employees use their annual leave?

Employees who are on furlough leave accrue their holiday entitlement in the usual way and therefore are able to use their annual leave whilst being on furlough.

An employee taking annual leave whilst on furlough must be paid at the usual rate of 100% of their salary. The employer can still claim through the furlough scheme,  but the employee’s salary must be topped up by the employer to ensure the employee is receiving the correct rate.

Can my employer enforce annual leave?

Employers are able to enforce annual leave for employees who are currently working. This includes those employees on furlough leave.

An employer must give you an adequate amount of notice to enforce annual leave. For example, if an employee is required to take 5 days annual leave 10 days’ notice must be given.

Less notice can be given, however, written agreement must be provided. 

Employers can enforce annual leave if you are on furlough leave. This would not disrupt your furlough leave and notice periods would remain the same.  

Can I enforce annual leave to those who are shielding?

An employer is able to do this.

However, as many employees on furlough leave are shielding and are having to self-isolate/ social distance, an employer may not want to enforce annual leave. The purpose of leave is to enjoy leisure time and relax which employees who are shielding may be unable to do. 

Bank holidays & furlough

As furloughed employees are not currently at work it is the employer’s decision on how bank holidays will be used. The options are:

  • To pay the usual bank holiday at a rate of 100% of the employee’s salary.   The employer can still claim through the furlough scheme, but the employee’s salary must be topped up by the employer to ensure the employee is receiving the correct rate.
  • To move the bank holiday. If the employer is in a position where they cannot accommodate this payment they may want to defer the bank holiday to a different day. The 100% will still need to be paid on this day even if it is deferred.

Holiday pay

The days in which employees take as annual leave must be paid at a rate of 100% of their salary. If an employee works variable hours the calculations of pay would be based on the previous 52 weeks after 6th April 2020. If this is not paid accordingly there would be a high risk of the employer being in breach of contract.

Best practice

It is best practice for employers to communicate with employees any changes with regards to annual leave to ensure they do not lose their statutory requirements.  This should be done by inducing a new policy in response to the pandemic, to ensure employees are aware of the changes in the company.

Whilst there is no obligation for an employer to consult with their employees on the implementation of this policy, we would advise that giving employees the opportunity to have a say in these unusual circumstances will help with employer/employee relationships for the future.

If employees are not informed that they may lose their statutory leave there could again be the risk of the employer breaching the employee’s contract. 

Establishing a new policy as early as you can will ensure employees are aware of the time scale they need to use their annual leave by to ensure they do not leave their entitlements. 

Still foggy over furlough? Read our general Q&A blog here.

For more information on how the team at JCP could help your business contact or telephone 03333 208644.