Furlough and Holidays
First thing’s first, if you are still unsure of what being on furlough means, or as an employer have not heard of the Government Job Retention Scheme, you should check out links to our own and the government’s content on these subjects. It seems that most employers are on board with what their plans for the immediate future are, however, I thought I would address a popular query that the team at KUHR keep getting asked about.
We’ve received lots of questions, from both Employers and Employees, with regards to holidays and holiday pay during periods of Furlough. So, I thought it would be helpful to run through a few different scenarios that may have already, or may yet still, crop up. The below examples should help illustrate what business expectations are and what you may be entitled to as an employee.
I would however, like to preface with the disclaimer that in such times of uncertainty, and with the government announcing snippets of new rules and regulations every day, there is always the possibility of change. The best thing to do as an employer is to get formal advice from HR advisors or solicitors, who’s jobs it is to stay up to date for your benefit. In their absence, a blog with the current advice of today will have to suffice!
Scenario 1: Not on Furlough
Billy had booked a long weekend off to visit the Isle of Wight with his family. Unfortunately, he’s not able to go for his recreational trip anymore and wants to cancel his holiday. Billy is still working and has not been furloughed.
Can Billy cancel his Time Off?
Billy can request to cancel his holiday, but his employer does not have to agree. ACAS recommends that where it is reasonable and possible employers do what they can to meet their employee’s holiday requests, however especially if the employer has already made plans to cover Billy’s absence, they have every right to insist that he still continues to use his annual leave allowance.
Scenario 2: On Furlough
Wendy is in a similar situation and has a booked period of annual leave that she wishes to cancel. Wendy is on furlough and is receiving 80% of her weekly income.
Can Wendy Cancel her Holiday?
Again, Wendy can request to cancel the holiday, but there is no statute or rule that means that an employer is obliged to meet this request. In this instance, the employer decides that they still want Wendy to take the annual leave.
What is Wendy Paid?
For every holiday day that is taken, Wendy should be paid 100% of her weekly rate (proportional to the amount of holiday she is taking), and not the temporary 80% that she has agreed to under the terms of her furlough. Being on furlough is a temporary measure put in place to avoid the need for redundancies but does not affect the accrual or terms on which holiday is taken and payment shouldn’t be made any differently for holiday days than as to normal working days out of furlough.
Scenario 3: Company Shutdown
Shelia owns a company that has seen a downturn in business. She has managed to find enough work to keep her few employees working, however, she knows that next week there is no work to be done. Rather than furlough her staff, she instead wants to close her business for a week and require that her team use their holiday allowance to cover this period off.
Can Sheila Make her Employees use their Holiday?
In this instance, no, but only because she has not given enough notice. An employer is within their rights to dictate when an employee needs to take their holiday, however twice as much notice must be given as to the period of leave that is being taken. As per this example, in order to require her staff to take a week’s worth of holiday, Sheila would need to have given two weeks’ notice.
An employer could require an employee to use up their leave whilst on furlough, although when doing so they would need to pay the full wage themselves and would likely be unable to claim government assistance. Again, the caveat for this is that the appropriate amount of notice must be given before the period of leave.
Additional Things to Consider
- As an employer, you will be paying full pay for any leave that is taken. If cashflow is tight or business is low – hence the need to furlough in the first place – you may find it difficult to pay normal rates. Furthermore, it is not clear whether holidays will be covered within the Job Retention Government Aid scheme, so it may not simply be a case of topping up the employee’s existing 80%.
- Employees cannot make the most of their holidays while on Lockdown. When it comes to insisting that existing leave be taken or requiring that leave be used consider that employees are unable to go away or make the most of time off work. In most instances, a transparent conversation between employer and employee about the needs of the business and individual will go a long way in to finding a satisfactory middle ground in any disputes.
- The government has recently stipulated that unused holidays may be carried over for two years. This means that employers should not need to panic about ensuring they allow adequate opportunity for employees to take leave in the holiday year, and that essential workers can continue to work throughout this period without fear of losing out on holiday.
- Lastly, using holiday can be used as a means by which to receive your regular income while under the temporary measures of a reduced payment from being on furlough. Highly paid workers especially, for which the Job Retention Scheme boundaries may not cover a large portion of the costs, could utilise their holiday allowance to ensure that they keep getting a steady income while not working.
When it comes to Holidays, there are hundreds of questions and scenarios that will arise during these turbulent and uncertain times. Holidays are a complicated subject in themselves at the best of times, so perhaps some reassurance can be found in the thought that there are thousands of other business owners and employees that are also unsure of where they stand!
Hopefully this article has provided a little guidance and structure to your understanding of obligations and rights around holiday, however if you still have any questions or your scenario is slightly different to the examples given, do not hesitate to get in touch directly with us at Kate Underwood HR.
Things are changing all the time, but we are sending out newsletters, blogs and email updates to ensure that all of our clients are getting the most informed and current advice possible. For a quick chat about any individual situation you may be facing as a business, or a more in depth conversation about why HR support would be right for your business please email me at [email protected], or phone us directly on 02382 025160.
Stay safe out there!
Pete