COVID-19: Clarity on annual leave entitlement

On 17 April 2020, Government updated their guidance “Check if your employer can use the Coronavirus Job Retention Scheme’ to include the heading “holiday pay”.

The guidance states;

• Whilst furloughed employees will continue to accrue annual leave as per your employment contract.
• Employees can take holiday whilst on furlough.
• Where an employee’s rate of pay varies, employers will need to calculate the pay on the basis of the average pay they received in the previous 52 working weeks as per the Working Time Regulations 1998.
• Employers will be obliged to pay the additional amounts of holiday pay on top of the grant from the Coronavirus Job Retention Scheme (‘CJRS’).
• Employers will have the flexibility to restrict when leave can be taken if there is a business need, during both the furlough and “recovery” period.
• If an employee is expected to work on bank holidays, then the employer can agree that this is included in the CJRS.
• If bank holidays are usually given as leave, then the employer would either have to top up the employee’s pay (the extra 20%) or allow a day of holiday in lieu.

See the updated guidance here.

Aspire Comment

Although the guidance clarifies that an employer has the ability to restrict when holiday can be taken, it fails to suggest whether an employer has the right to require employees to take holiday leave.

Strangely, it doesn’t refer to the Working Time (Coronavirus) (Amendment) Regulations 2020 which give workers a statutory right to carry leave over into the next two leave years (see our news here). Instead, the guidance seems to encourage all leave being taken in the current holiday year by stating;

“You can agree with your employer to vary holiday pay entitlement as part of the furlough agreement, however almost all workers are entitled to 5.6 weeks of statutory paid annual leave each year which they cannot go below”.

Government conclude the holiday pay section by saying;

“During this unprecedented time, we are keeping the policy on holiday pay during furlough under review”.

This suggests that we may see further changes to the guidance on holiday pay in due course.

If you require any further advice or guidance about how to manage the furlough process or any other employment guidance, please get in touch with one of our advisors on 0121 445 6178 or email enquire@aspirepartnership.co.uk.