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Employment Law - Update - Covid-19 - Coronavirus – Holidays

One thing which has left me scratching my head over the last few days – and by the sound of it also a number of clients, colleagues and contacts – is exactly how holiday interacts with Furlough Leave.

Government guidance is frustratingly silent on the topic. Some things are clear, others less so. Here are some thoughts: -

1. Holiday continues to accrue during Furlough Leave – definite!

2. The Government has introduced new regulations allowing for greater carryover of holidays. If you listen to the headlines it may be thought that this only applies to those in the emergency sector who as a result of the crisis are unable to take holidays. However, a reading of the actual regulations shows that this goes a lot further. The provision is that up to 4 weeks holiday can be carried over from the relevant holiday year for up to 2 years if it is ‘not reasonably practicable’ to take the leave as a result of the effects of Coronavirus, including the effects on the worker, the employer or the wider society. It follows that if an employee does not take holiday during Furlough Leave and afterward the work demands are such (hopefully) that the employer is not able to agree to a glut of holiday requests when things return to some sort of normality, the employer can make use of this provision. It wouldn’t be a good idea to refuse all holiday as holidays are regarded as a health and safety provision. However, it would be reasonable to fairly regulate holidays or to deny holiday during a relatively short and particularly busy period even if this meant the employee couldn’t take all his or her holiday during the relevant holiday year.

3. What if holiday is taken during Furlough Leave itself? If anyone has seen a definite position, please let me know and I will confirm it and distribute the information as appropriate. The concern is the answer to the question why is the employee not at work? If the answer is Furlough Leave, then not a problem. Generally, the employer can expect to get 80% of the pay – subject to more detailed regulations – back. If the answer though is ‘holiday’ that may suggest that the employee is not actually on Furlough Leave. Given that there is a minimum 3 week period of Furlough Leave to enable an employer to qualify for the Government payment, the worst-case scenario would be that if the holiday is taken after say 2 weeks of Furlough Leave there is no entitlement to a Government payment at all for those 2 weeks. This would be very unsatisfactory and lead to a collapse in confidence in the Government and the scheme. Alternatively, it is possible if Furlough Leave is instead in some way ‘suspended’ during the holiday and then one continues to count the days after holiday towards the minimum 3-week period. This is particularly relevant with the Bank Holidays coming up.

4. Hopefully, there will be clarification shortly and the Government/HMRC won’t get too pernickety about it.

5. There is not surprisingly a tension between those who are left behind and having to work and those on Furlough Leave receiving 80% of pay for not working and with the ability to earn elsewhere. This is exacerbated that those on Furlough Leave are continuing to accrue holiday, whilst not working, and may wish to take it upon their return. One suggestion that I have been making, because in most cases an employer will have to get an employee to agree to Furlough Leave in any event and most employers provide more than the statutory minimum holiday, is to require an employee going on Furlough Leave to agree to a reduction in holiday in proportion to the amount of time spent on Furlough Leave provided that it does not thereby reduce their holiday entitlement below the statutory minimum. This may also temper the amount of holiday requests upon returning from Furlough Leave.

I hope that readers find these thoughts helpful. In these particularly troublesome times, I don’t claim to be the fountain of all knowledge and if others have ideas or knowledge that I don’t have they are invited to revert to me with their thoughts.

Stay safe everyone!

Nigel Tillott, Head of Employment and Regulatory Law, DDI 01452 689100 



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