A number of clients have shown concern over the issue of holiday whilst their employees are furloughed and the rules around this. The CIPD have issued their latest guidance which I thought was worth sharing with you.
Enforcement of leave for furloughed staff
Previously, it has been understood that organisations can require a worker to take annual leave whilst on furlough, provided that the worker is paid in full for the time. Whilst the updated guidance does not change this, it does provide further clarity. It states that if an organisation wants to do this, they should ‘consider whether any restrictions the worker is under, such as the need to socially distance or self-isolate, would prevent the worker from resting, relaxing and enjoying leisure time, which is the fundamental purpose of holiday.’ This could potentially throw up roadblocks for furloughed staff being made to take leave, however it does remain to be seen how this would be enforced going forward.
Furloughed staff taking bank holidays
Where a bank holiday falls during furlough and the worker would have usually worked the bank holiday, their furlough will be unaffected by the bank holiday. However, if the worker would usually have had the bank holiday as annual leave, there are two options. Either the bank holiday is taken as annual leave, in which case the organisation must pay the correct holiday pay for the worker. Or, the bank holiday is deferred if the organisation and the worker agree that the bank holiday will not be taken as annual leave at that time. This holiday will have to be given later in the year.
Carrying over untaken leave
Workers who have not taken all of their statutory annual leave entitlement due to COVID-19 can still carry it over into the next two leave years; this applies where it was not ‘reasonably practicable’ for the leave to be taken. This applies to all organisations and workers but only to the first four weeks of leave; the additional 1.6 can already be taken into the following leave year by agreement with the organisation.
In deciding what is ‘reasonably practicable,’ organisations should consider the following:
- whether the business has faced a significant increase in demand due to coronavirus that would reasonably require the worker to continue to be at work and cannot be met through alternative practical measures
- the extent to which the business’ workforce is disrupted by the coronavirus and the practical options available to the business to provide temporary cover of essential activities
- the health of the worker and how soon they need to take a period of rest and relaxation
- the length of time remaining in the worker’s leave year, to enable the worker to take holiday at a later date within the leave year
- the extent to which the worker taking leave would impact on wider society’s response to, and recovery from, the coronavirus situation
- the ability of the remainder of the available workforce to provide cover for the worker going on leave.
Organisations should do everything reasonably practicable to ensure that the worker is able to take as much of their leave as possible in the year to which it relates, and where leave is carried forward, it is best practice to give workers the opportunity to take holiday at the earliest practicable opportunity.
It is advisable that, when a new leave year starts, that the carried over leave is taken ‘first’. Where employment is terminated during the two-year carry over period, the worker is entitled to be paid in lieu of the untaken carried over annual leave. Any leave carried over due to the relaxation on carry over, which is not taken in the next two leave years, will be lost.
All of the above applies to agency workers who have worker status as it applies to standard ‘workers’. Some agency workers on a contract for services may not be entitled to the accrual of holiday or to take holiday under the Working Time Regulations while on furlough because they are not workers or treated as workers under those regulations when between assignments or otherwise not working on assignments. Contracts may nevertheless include holiday provisions which will continue to operate in the same way as they did prior to the furlough period.