The Government’s Department for Business, Energy & Industrial Strategy (DBEIS) has published new guidance titled ‘Holiday entitlement and pay during coronavirus’.
Strictly speaking, the new guidance has no legal effect and, therefore, Employment Tribunals will not be obliged to follow it when deciding cases about holiday. However, it is significant because it goes further, and into more detail, than previous guidance on this subject.
Holiday entitlement and pay during coronavirus guidance
The DBEIS guidance deals with both employees who continue to work and those who have been placed on furlough under the Coronavirus Job Retention Scheme (CJRS).
There has been considerable uncertainty about the holiday rights of furloughed employees, in particular. Until now, much reliance has been placed on HMRC’s guidance for employees titled ‘Check if your employer can use the Coronavirus Job Retention Scheme’ (as updated periodically).
HMRC’s guidance is clear on the points that furloughed employees:
- continue to accrue holiday; and
- can take holiday whilst on furlough.
It leaves some important questions unanswered, however, such as whether employers can require employees to take holiday whilst on furlough. The DBEIS guidance tackles this question, indicating that employers can.
However, there are caveats to this. As well as encouraging employers to…
“engage with their workforce and explain reasons for wanting them to take [holiday] before requiring them to do so”
…the DBEIS guidance says that employers should consider whether any restrictions the employee is under, such as the need to socially distance or self-isolate, would prevent the employee from resting, relaxing and enjoying leisure time, which is the fundamental purpose of holiday.
Therefore, the DBEIS guidance is far from a ‘green light’ for employers to run-down furloughed employees’ holiday entitlements (with the benefit of the CJRS grant). It does suggest, however, that employers’ have some power to manage furloughed employees’ holiday entitlements.
The DBEIS guidance confirms that furloughed employees continue to accrue holiday while on furlough, taking holiday does not ‘break’ furlough and holiday pay during furlough ought to be ‘the correct holiday pay in accordance with current legislation’, which is based on normal pay. It notes that employers will need to make-up the difference between employees’ furlough pay and their normal rate of pay, but:
“as taking holiday does not break the furlough period…can continue to claim the 80% grant from the government to cover most of the cost of holiday pay.”
If you would like any further information about these issues or advice as to how they apply to your workforce, please contact Peter or a member of the team in Derby, Leicester or Nottingham on 0800 0241 976 or via our online form.