Holiday and Furlough

This is a completely different question to whether staff can carry over holiday. It is clear from the guidance that they can carry over up to 4 weeks leave if it is “not reasonably practicable” to take it within the holiday year. We believe that this is designed to assist key workers who are required to work and potentially cancel annual leave at the moment. However, on the ACAS website, an example of when a person is not able to take their holiday, is when they cannot take it as they have been laid off. ACAS therefore seems to have the view that you cannot be on holiday at the same time as furlough.

It is clear that, if employees or workers are on SSP, they will not be “furloughed” until the end of the sick leave period. This would suggest that only one type of leave can apply at one time. However, if an employee is on maternity leave, statutory maternity pay can be claimed back as a wage cost under CJRS. This would suggest that an employee can be furloughed and on maternity leave.  

Our view is that employers can be on annual leave and furlough leave at the same time and that employers can reclaim money under the CJRS for those that are furloughed and on holiday leave. It therefore follows that two weeks holiday would count towards the furlough minimum 3 week period.

As employers, you have the right to require your staff to take holiday, although the regulations require that you must give twice the number of days’ notice of the amount of leave that the employee is required to take. Therefore, if you require somebody to take one week’s leave, you must give them two week’s notice.

We believe that holiday pay (or at least the statutory minimum 4 weeks) should be based on 100% of salary (rather than the 80%) and should be based on normal remuneration (i.e. including bonuses, commissions etc) in the usual way. From April, holiday pay should be calculated by reference to a 52 week period (as opposed to the current 12 weeks).  

It is not yet clear what the position is in relation to the additional 1.6 weeks. It will almost certainly be payable at 100% of salary but potentially not including bonuses/commission etc (as this is derived from EU law and the extra 1.6 weeks is UK law). This could be an issue with regard to the bank holidays that fall within April and May so we will be in touch about this as soon as we know more.

Any contractual leave that you offer over and above the statutory minimum is payable at the rate that you agree, so this could be the 80% potentially.

For the reasons set out below, we believe that the best approach would be to allow (or request) staff only take leave that has accrued up to 31st May 2020. So in a situation where your holiday year runs from 1st January – 31st December, this would be 41.7% of the year, so the accrued leave to the end of May would be 41.7% of their annual leave (not including bank holidays). If, for example a person is entitled to 24 days per year (plus bank holidays), this would work out as 10 days accrued at the end of May. It would not be sensible to allow staff to take more than they have accrued by the end of May as they could end up owing you a significant amount of holiday which they would have to pay back if they left. Furthermore, it will demotivate staff if they have no leave left to take for the rest of the year once we are out of this period.

The benefits of asking staff to use their leave during furlough are that:

The risks are:

Hopefully the above makes sense but please do not hesitate to contact me on ek@kilgannonlaw.co.uk or 07970 870014 if you have any queries on the above.