Annual leave and Coronavirus
The position has lacked clarity. Even now, holiday pay during furlough remains under review, so the position could change again.
The current position is: -
- 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 (which means holiday pay should be based on their pre-furlough normal rates of pay). Employers will need to top up any furlough grant as needed;
- Employers can restrict when annual leave can be taken where there is a business need;
- If employees usually work on bank holidays, 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 usual holiday pay for each bank holiday or give employees a day in lieu.
A temporary law has been introduced to allow workers to carry over 4 weeks’ annual leave into the next 2 annual leave years where it is not been reasonably practicable for them to take annual leave as a result of the effects of Coronavirus.
Guidance does not yet technically confirm whether employers can rely on Regulation 15 of the Working Time Regulations 1999 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 during periods of furlough; however, ACAS guidance indicates that they cannot. There can be no certainty on this point until the Government provides clarification.