Annual Leave During Coronavirus - Where Are We Now?
Until recently, the Government's coronavirus (COVID-19) guidance has left employers and employees somewhat in the dark about taking annual leave during periods of lockdown and furlough.
The position is now much more settled in light of the most recent guidance and is summarised in this article.
However, it is important to note that the Government has stated that the policy on holiday pay during furlough will remain under review - so this newly clarified position remains subject to change.
What's the Current Position with Annual Leave?
- Annual leave continues to accrue whilst employees are furloughed.
- Employees can take annual leave during furlough.
- Employees should be paid their 'usual holiday pay' for any annual leave taken during furlough (this means holiday pay based on their pre-furlough normal rate of pay). Employers will need to top up any furlough grant as needed.
- Employers retain the flexibility to restrict when annual leave can be taken where there is a business need.
- If employees usually work bank holidays, then employers can agree that this is included in the furlough grant payment. If employees usually take bank holidays as leave, then employers either have to top up the furlough pay to the usual holiday pay for each bank holiday day, or give employees a day of holiday in lieu.
- The Government has introduced a temporary law enabling workers to carry over four weeks' leave into the next two leave years where it has not been 'reasonably practicable' for them to take that leave as a result of the effects of coronavirus '(including on the worker, the employer, or the wider economy of society)'. This is most likely to apply where workers have been self-isolating or ill, or have had to continue working due to business need. Therefore, it is most likely to be relevant for key worker industries.
Can Employers Require Workers to Take Their Annual Leave?
- Whilst we now have some clarity that annual leave can be taken during a period of furlough and what should be paid during this leave, the guidance does not yet technically confirm whether employers can rely on regulation 15 of the Working Time Regulations 1999 (WTR) to require an employee to take their annual leave during periods of furlough.
- Many commentators have noted that there is nothing to say employers are not able to require leave to be taken and the consensus view appears to be that they can. However, it is not clear how this would sit with the temporary changes made to the WTR which enable workers to carry over holiday where it was not reasonably practicable for them to take their leave due to coronavirus. Therefore, we cannot be certain on this point until the government provides clarification.
We will keep you updated with further developments.