Holidays during and beyond the furlough period

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Can employees be asked to take holidays during the furlough period?

Confusion remains around the issue of holidays and furlough: can employees take holiday during furlough? Can they carry holiday over for up to 2 years? What should they be paid for any holiday taken?

ACAS guidance, issued on 31 March, interprets the new regulations allowing holiday to be carried over for two years as being there to cover three situations including where employees who could not take holiday due to being furloughed. However, this is not supported by any existing Government guidance and does not appear to be consistent with current case law.

Unlike employees on sick leave and maternity/adoption/shared parental/paternity leave who cannot be asked to take holiday, furlough leave is more equivalent to being on garden leave and until further guidance is issued by the Government, there would seem to be no reason why employers cannot ask an employee to take holiday during furlough.

Even if subsequent guidance states that employers are not able to ask employees to take holiday during a furlough period, (which we do not believe is correct), there is nothing to prevent the employer furloughing an employee for three weeks then directing that they take a week’s holiday and then furloughing them again for a further three weeks, provided the employer gives twice as much notice as the actual holiday.

Nevertheless, all the guidance from ACAS does suggest furloughed employees can carry unused holiday over for up to 2 years. Whatever may be the case, other questions now arise over holidays and furlough:

  • How much should employees be paid for holidays during or after furlough?

From April 6th 2020, where holiday pay needs to be averaged, this must be carried out over the previous 12 month period. Again there is no official guidance on this so it is expected that employers should calculate holiday pay based on pre-furlough averages;

  • What about Bank Holidays?

If employees are normally required to work bank holidays but are unable to do so as they are currently furloughed, employers should confirm if they can take this at a later date or are required to take it as holiday during the furlough period. Bank holidays would normally have to be taken in the current holiday leave year however, if furlough prevents this, the bank holidays could also be carried over.

Decisions on when, how and even if holidays should be carried over require careful consideration: the impact of having some, many or even all of your workforce carrying over up to 5.6 weeks’ holiday entitlement into the next 2 years could have a significant effect on production and operations.

Planning is essential and professional advice is recommended.

Contact us now for support.

Additional guidance on furloughing can be found here