14th May 2020

Coronavirus: New guidance on holidays published

The guidance explains how holidays and pay operate during the pandemic and covers both workers who continue to work and those who have been furloughed.

The guidance addresses accrual of annual leave entitlement, taking holiday during furlough, the rate of holiday pay and the new right to carry forward leave that could not be taken because of the COVID-19 pandemic, as briefly summarised below:

  • Furloughed workers continue to accrue entitlement to annual leave under the Working Time Regulations 1998 (WTR), and can take holiday without bringing the period of furlough to an end;
  • Employers can require workers to take holiday while on furlough but it suggests that ‘the employer 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’;
  • Holiday pay is based on ‘normal remuneration’ and where this is above the furlough rate of pay, the employer will have to pay the difference but will still be able to claim up to 80% (or £2,500 per month) under the Coronavirus Job Retention Scheme (CJRS);
  • It also covers the impact of the amendment to the WTR which allows for the carrying forward of untaken holiday for two years, where it has not been ‘reasonably practicable’ for a worker to take some or all of the basic four weeks’ annual leave due to the effects of coronavirus;
  • When considering whether it was not reasonably practicable for a worker to take leave, factors may include the business facing a significant increase in demand; the extent of disruption to the workforce and the practical options to provide temporary cover of essential activities; the health of the worker and need to take a period of rest and relaxation and the length of time remaining in the worker’s leave year; and the ability of the remainder of the available workforce to provide cover for the worker going on leave;
  • Employers should make efforts so that workers can take as much leave as possible in the leave year and where carried forward, it is best practice to allow workers to take holiday at the earliest opportunity;
  • It also notes that furloughed workers will be unlikely to need to carry forward statutory annual leave, as they will be able to take it during the furlough period, so long as the employer pays the correct rate of holiday pay.

Read the Government’s guidance on holiday entitlement and pay here.

Please note: The above is a brief update and overview of continuing developments and guidance on workers’ entitlement to holiday and holiday pay during the coronavirus pandemic. Nothing in this article constitutes legal advice and we are not liable for any reliance on the information provided. This is a rapidly changing subject, and whilst correct at the time of writing, circumstances may have changed since publication.

To find out more about anything covered in this article, or to discuss the potential impact of COVID-19 on your business, please contact Kerrie Hunt or another member of Thrings’ Employment and Immigration team.

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