As we move into what is traditionally holiday season, a lot of employers are starting to think about how best to manage annual leave which is steadily building up.
Initially there was some uncertainty surrounding whether employees on furlough continued to accrue annual leave and were able to take their leave while furloughed.
Briony McDermott, employment solicitor at Wake Smith, provides an update and advice.
“The latest Government guidance on the Coronavirus Job Retention Scheme (CJRS) now confirms that holiday (both statutory and contractual) continues to accrue during furlough; and employees can take holiday whilst on furlough.
“It has also been clarified that employers can compel employees to take annual leave while furloughed, provided the requisite notice period is given.
“The notice is at least twice the length of the period of leave that an employee is being asked to take. For example, if an employer wants an employee to take five days’ leave, they will need to give the employee at least ten days’ notice.
“This has, however, raised a question as to whether forcing an employee to take annual leave while furloughed is in line with the spirit of the entitlement.
“The Working Time Directive was introduced as a health and safety measure, with the purpose of annual leave being to give a period of rest, relaxation and leisure.
“It is therefore arguable that employees who are compelled to take leave at this time are not benefiting from annual leave as envisaged under the health and safety objectives of the Directive.
“However, as the restrictions are now being relaxed, and travel is slowly becoming possible, this argument would seem to be weakening.”
How about pay?
Briony added: “It is important to note that even where employees are taking annual leave while furloughed, they are entitled to their ‘normal remuneration’ i.e. the same pay that they would have received, had they been working, rather than their furlough pay.
“This means that where employees are being paid less than their normal pay while on furlough, their employer must top this up.
“If an employee is entitled to contractual annual leave (over and above the minimum statutory entitlement), employers may be able to agree a reduced rate with employees for holiday taken whilst furloughed.
Can you carry over leave?
“Back when the CJRS was initially announced in March, the Government introduced temporary amendments to the Working Time Regulations to permit the carry-over of the 4 weeks’ statutory leave entitlement where it is not “reasonably practicable” to take it in the leave year “as a result of the effects of coronavirus”, added Briony.
“Any leave rolled over must be taken in the following two years.
“It is currently unclear what circumstances this would include, but it may extend to those unable to take leave due to shielding or other restrictions.
“These provisions do not extend to any contractual leave entitlement over and above the statutory four weeks leave and are unlikely to apply to furloughed workers as this would not genuinely affect an employee’s ability to take annual leave.
The key is communication
Briony concluded: “Given the unprecedented circumstances, it is sensible to communicate with staff clearly in respect of annual leave entitlements and any requirements the business may have to manage these.
“Try and maintain open dialogue and listen to any concerns and ideas staff may have regarding their annual leave and how best to deal with this.”
Wake Smith’s next two HR Forums, with recruitment specialists Brewster Partners, take place online on July 23 from 10-12pm and July 30 from 1-3pm. Both sessions will focus on returning to work as COVID-19 restrictions begin to be lifted and will cover flexible furlough, childcare issues, risk assessments, health and safety, flexible working and practical pointers.
Places are limited. To book call Sarah Chappell on 07875677136 or email [email protected]
For legal advice on employment issues contact Wake Smith Solicitors on 0114 266 6660.
