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Holiday entitlement and Pay – updated guidance (COVID-19)

Holiday entitlement and Pay – updated guidance (COVID-19)

Since my last blog updating on the emergency legislation passed permitting the carry-over of part of an employee’s statutory holiday entitlement for up to two years, the government has issued guidance on holiday entitlement and pay during the COVID-19 pandemic. As this is guidance not legislation, the Employment Tribunals are not required to follow it but the guidance does go some way to answering the various questions that have come up as employers and employees tackle the new employment world including in relation to ‘furloughed workers’ as set out below:

  • Accrual of holiday entitlement (both statutory and contractual) continues in the usual way for all workers, including furloughed workers.
  • Employers can require all workers (including furloughed workers) to take holiday and cancel pre-booked holiday.
  • To require a worker to take holiday employers need to give notice double the length of the holiday (e.g. two weeks’ notice of one week’s holiday).
  • To cancel a worker’s pre-booked holiday, employers need to give notice equivalent to the length of the holiday (e.g. one week’s notice to cancel one week’s holiday).
  • Employers and employees can by agreement give each other shorter notice to take or cancel holiday.
  • Furloughed workers can take holiday without disrupting their furlough period.
  • When requiring furloughed workers to take holiday, employers should consider anything that prevents rest and enjoyment of the break e.g. a period of required self-isolation.
  • Bank holidays for those still working are as normal.
  • Furloughed workers who usually take bank holidays as holiday can either continue to take them as holiday (for which the furloughed worker would receive holiday pay as opposed to the rate of pay applicable during the period of furlough) or seek agreement with their employer to defer the day’s holiday.
  • Holiday pay should be calculated on a worker’s usual earnings where the worker has normal working hours and should reflect what they would have earned if they had worked their normal working hours (e.g. if they had not been furloughed).
  • Where workers have no normal working hours this an average of the previous 52 weeks of remuneration excluding weeks in which there was no remuneration.
  • Up to four weeks’ of holiday can be carried over for up to two years, where it is not ‘reasonably practicable’ for workers to take their holiday entitlement before the end of the leave year.
  • It is likely to be ‘reasonably practicable’ for most workers and furloughed workers to use their holiday before the end of the leave year and the provision is designed to assist front line workers / businesses directly supporting the UK’s COVID-19 response where ability to take holiday is or has been restricted.

Usually workers in most sectors are, within reason, able to use their holiday entitlement at a time convenient for them. It’s therefore recommended that employers explain to all workers why measures such as requiring people to take holiday at a set time or cancelling booked holidays are being considered and/or implemented. Employers may wish to point employees to the guidance which states that employers should do everything reasonably practicable to ensure that workers are able to take as much of their leave as possible in the year to which it relates.

Like all employer/employee interactions, engagement will be the key. Given the current global situation, it is likely that workers will understand the various business reasons behind decisions around holiday, but creating an open discussion culture is more important than ever.

Posted on May 19, 2020

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