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Holiday and the furlough scheme – what are the rules?

The government has extended the furlough job retention scheme until October 2020, although specific details of the scheme from August are yet to be clarified. In view of the two extensions to the furlough scheme, the issue of what happens to holidays is important.

Here are the key issues from the government’s latest guidance which was published on 13th May 2020:

Does annual leave accrue?

Workers placed on furlough continue to accrue statutory holiday entitlements under the Working Time Regulations and any additional holiday provided for under their employment contract.

Can workers be required to take annual leave?

Employers can require staff to take annual leave while they are furloughed, subject to usual statutory notice periods. Under the Working Time Regulations the employer may nominate dates on which an employee must take some or all of their statutory annual holiday entitlement, provided that the employer gives the required advance notice. The notice required is the minimum of twice as many days as the number of the holidays that the employer requires the employee to take.  For example, if the employer requires the employee to take 5 days’ holiday, it has to give 10 days’ notice.

If employers require workers  to take holiday then employers should consider the guidance which states that employers 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’

How much pay are workers entitled to if they take holiday whilst on furlough?

Furloughed workers are entitled to pre-furlough rates of pay and therefore this will have to be topped up by the employer if workers are receiving 80% of their pay up to a maximum of £2,500 per month. In relation to bank holidays, workers can either take the bank holiday as annual leave, and be paid under the terms of their employment contract, or bank holiday can be deferred if this arrangement is agreed between the employer and worker.

How many holidays can be carried over?

The government has passed  legislation The Working Time (Coronavirus) (Amendment) Regulations 2020 allowing workers to carry forward some or all of the basic four week annual holiday entitlement where it has not been reasonably practicable for the worker to take leave due to the coronavirus pandemic. The untaken holiday can be carried forward into the following two leave years.

Employees should put together a holiday policy dealing with these issues and circulate to the workforce.  If you have any questions please contact Sejal Raja, Head of Employment on sejal.raja@rlb-law.com


Disclaimer

This briefing is for guidance purposes only. RadcliffesLeBrasseur LLP accepts no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommends that appropriate legal advice be taken having regard to a client's own particular circumstances.

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