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Annual Leave for Furloughed Staff: Guidance for employers
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The latest rules regarding annual leave is that an employer can enforce annual leave during furlough by providing double the length of notice as long as pay is topped up to full pay, please see below further guidance on holidays during furlough.

Two template letters are also available to download  in relation to requiring employees to take annual leave during furlough or alternatively refusing an annual leave request in case these are of assistance.

Workers who have not taken all of their statutory annual leave entitlement due to COVID-19 will now be able to carry it over into the next 2 leave years; this applies where it was not reasonably practicable for the leave to be taken. This applies to all employers and workers, not just key workers and their employers but only to the first 4 weeks of leave; the additional 1.6 can already be taken into the following leave year by agreement with the employer.

What does reasonably practicable mean?

When considering whether it was not reasonably practicable for a worker to take leave as a result of the coronavirus, employers should consider the following:

  1. whether the business has faced a significant increase in demand due to coronavirus that would reasonably require the worker to continue to be at work and cannot be met through alternative practical measures 
  2. the extent to which the business’ workforce is disrupted by the coronavirus and the practical options available to the business to provide temporary cover of essential activities
  3. the health of the worker and how soon they need to take a period of rest and relaxation 
  4. the length of time remaining in the worker’s leave year, to enable the worker to take holiday at a later date within the leave year 
  5. the extent to which the worker taking leave would impact on wider society’s response to, and recovery from, the coronavirus situation 
  6. the ability of the remainder of the available workforce to provide cover for the worker going on leave.

The 5th bullet point may well not apply to everyone, and may apply only to specific key workers who are integral to the UK’s response to coronavirus. 

Employers should do everything reasonably practicable to ensure that the worker is able to take as much of their leave as possible in the year to which it relates, and where leave is carried forward, it is best practice to give workers the opportunity to take holiday at the earliest practicable opportunity.

The guidance states:

“An employer’s ability to require a worker to take annual leave is unaffected by the ability to carry holiday into future leave years. Where it is reasonably practicable for a worker to take annual leave, employers should facilitate this. Generally, employers remain able to require workers to take annual leave to ensure that holiday is taken in the leave year to which it relates.”

Arguably, we could read “facilitate” to mean “enforce”, especially because of the inclusion of the last sentence of that quote. Where there is time before the end of the leave year for a worker to take annual leave, and there are no circumstances that would mean the employer can’t fit the leave in, then enforcing annual leave would seem to be appropriate.

The guidance states that a furloughed worker is unlikely to need to carry forward statutory annual leave, as they will be able to take it during the furlough period (subject to the notice requirements) – this seems to strengthen the position on enforcing annual leave.

However, it indicates that it would not be reasonably practicable for the employee to take their leave whilst on furlough if the employer is unable to pay 100% (i.e. make up the extra 20% of pay required during annual leave). It seems then that it would not be reasonable for the employer to enforce annual leave when they cannot pay the extra 20% to top up to 100%. In this situation, the worker must still be given the opportunity to take their annual leave, at the correct holiday pay, in the next 2 leave years.

To ensure that workers do not lose the holiday entitlement that they are entitled to, it is best practice for employers to inform workers of both the need to carry forward, and how much leave will be carried. ‘Carried holiday’ is subject to further protections – to be able to refuse to allow a worker to take ‘carried holiday’ on particular dates, the employer must have good reason. It makes sense that, when a new leave year starts, that the carried over leave is taken ‘first’. Where employment terminated during the 2 year carry over period, the worker is entitled to be paid in lieu of the untaken carried over annual leave. Any leave carried over due to the relaxation on carry over, which is not taken in the next 2 leave years, will be lost.

All of the above applies to agency workers who have worker status as it applies to standard ‘workers’. Some agency workers on a contract for services may not be entitled to the accrual of holiday or to take holiday under the Working Time Regulations while on furlough because they are not workers or treated as workers under those regulations when between assignments or otherwise not working on assignments. Contracts may nevertheless include holiday provisions which will continue to operate in the same way as they did prior to the furlough period.