Coronavirus (COVID-19): Holiday Entitlement and Pay Guidance

18th May, 2020 by Jonathan Mumby

The Government has published guidance covering how holiday entitlement and pay operate during the coronavirus pandemic, including for those who continue to work and who have been furloughed in accordance with the Coronavirus Job Retention Scheme (CJRS).

The guidance helpfully provides clarification on some of the potentially more problematic areas including whether holiday accrues during furlough leave, whether holiday can be taken during furlough leave and how holiday pay should be calculated for those on furlough leave. Whilst it will be important for employers to consider the guidance in full, some of the more notable points include:

Those on furlough leave will continue to accrue their statutory holiday entitlement (i.e. their minimum 5.6 weeks entitlement or pro-rata equivalent). How extra contractual entitlement is dealt with will depend on the relevant contractual provisions;
Those on furlough leave can take holiday without disrupting their furlough leave;
Employers can require employees/workers to take annual leave whilst on furlough leave although will need to: a) observe the usual notice requirements; and b) consider whether the employee/worker will be able to properly rest (and therefore take holiday) if they are social distancing and/or self-isolating;
Holiday pay for those on furlough leave should calculated is the usual way (i.e. 100% of the individual’s normal remuneration); and
Guidance on when it will not be reasonably practicable for employees/workers to take holiday due to the coronavirus and therefore when they will be entitled to carry forward holiday entitlement, derived from the Working Time Directive, into subsequent holiday years.

A copy of the guidance can be read in full here.

Employment law specialist, Jonathan Mumby comments:

“This guidance will be welcomed by employers. There has been a significant degree of uncertainty, particularly concerning whether furloughed employees can take or be forced to take holiday whilst furloughed. Now these matters have been clarified, employers can take steps to manage holiday entitlement for furloughed employees. That will help avoid practical difficulties of having to accommodate vast amounts of accrued but untaken holiday once we are out of lockdown.

If you would like to discuss any aspect of the guidance or how to deal with holiday entitlement in general, please contact a member of the employment team.”

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