In the absence of any clear direction from the government and at the request of a number of our clients, we will attempt to decipher the holiday scenarios associated with furloughing your employees – especially important with the Easter and May bank holidays looming!
Please note that this is our understanding at the time of writing, we have tried to apply a common sense approach, and as long as you keep records of the decisions you make, and apply them consistently it will be relatively easy to retrospectively review and make amendments in light of any further guidance from the Government on this subject.
Carry over from 2020 holiday entitlement
On the 27th March, the Government announced they have temporarily amended the Working Time Directive so that workers who have not taken all of their statutory annual leave entitlement due to COVID-19 will now be able to carry it over into the next 2 leave years.
These measures were taken to ensure furloughed workers won’t lose their leave entitlements; this move gives flexibility to business at a time when it is most needed. Allowing furloughed employees to take their holiday at a time when it will not impact the business.
Just imagine if post furlough arrangements your employees all came back and had to take their holidays! Not ideal for an already fragile business environment.
Under the old ‘Pre-Corona job retention scheme’ rules…
Pre-Corona virus and the Corona Job retention scheme, almost all workers are entitled to 28 days holiday including bank holidays each year. However, most of this entitlement cannot be carried between leave years, meaning workers may lose their holiday if they do not take it.
There was also an obligation on employers to ensure their workers take their statutory entitlement in any one year – failure to do so could result in a financial penalty.
The new temporary regulations allow up to 4 weeks of unused leave to be carried into the next 2 leave years, easing the requirements on business to ensure that workers take statutory amount of annual leave in any one year.
This will mean staff could continue working in the national effort against the coronavirus without losing out on annual leave entitlement.
The proposed changes…
The changes will also ensure all employers affected by COVID-19 have the flexibility to allow workers to carry over leave at a time when granting annual leave could leave them short-staffed in some of Britain’s key industries, such as food and healthcare.
Business Secretary Alok Sharma said:
Whether it is in our hospitals, or our supermarkets, people are working around the clock to help our country deal with the coronavirus pandemic.
The changes will mean these valued employees do not lose out on the annual leave they are entitled to as a result of their efforts, and employers are not penalised.
At this crucial time, relaxing laws on statutory leave will help ensure key workers can continue the important work to keep supplies flowing, but without losing the crucial time off they are entitled to.
We are not clear if the new rules apply to non-furloughed workers, as they can in theory still take paid leave. Albeit for stay at home, self-catering holidays. I presume they do apply, but again there is little or no guidance on this matter. How on earth can they police this?
You may need a system like BreatheHR where you can programme your holiday carry over for certain individuals. Breathe also allows you to record furloughed employees too –how on earth would you easily monitor this arrangement without an HR Information system?
Who do the changes apply to …?
The changes will amend the Working Time Regulations, which apply to almost all workers, including agency workers, those who work irregular hours, and workers on zero-hours contracts.
The change is aimed at allowing businesses under particular pressure from the impacts of COVID-19 the flexibility to better manage their workforce, while protecting workers’ right to paid holiday.
The new legislation
Bank holidays and furloughed employees…
Our understanding, and having spoken to a number of employment lawyers this is their understanding too – you cannot be ‘furloughed’ and take annual leave, hence the ‘carry over’ arrangements. There is no government guidance on the subject of what to do with Bank Holidays, so this is what we think (and this is only what we think!), nothing changes when furloughed, the bank holidays are no different to any other furloughed day.
As there is no guidance from the Government on Bank Holidays during furlough arrangements, and they only reference the 20 days holiday carry over, we have to assume that the bank holidays are swallowed up within the furlough period.
If you decide to pay the 20% extra to top up for the lost revenue for bank holidays so your people really are not at detriment, do it as a bonus for their return? That way they will not be at detriment and you will not be breaking the furlough rules – just an idea!
What ever you decide to do within your organisation, be consistent and apply your ‘ruling’ to everyone. Keep a note of what you decide and if there is further clarification from the Government then you can retrospectively amend your working practises.
Talk to us about setting up a BreatheHR account, make your life easier and be able to monitor holiday and review the documents you need to keep in relation to furloughing for HMRC. Use any downtime you may have now to set up systems for when this is all over and we are back to … normal.
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