Using holiday during the coronavirus pandemic

Last month, the government amended the Working Time Regulations so that workers who are unable to take their holiday in the current holiday year due to the coronavirus pandemic can carry over the first four weeks (20 days for a full-time worker) of their statutory holiday entitlement into the following two holiday years.  This applies where it is not reasonably practicable for the worker to take their holiday in the current leave year due to coronavirus. 

The government’s announcement focussed on easing the requirements on business to ensure workers take their statutory holiday in the current leave year, at a time when they may be needed to continue working in the national effort against the coronavirus. The changes ensure that workers who are needed to continue working do not lose out on their holiday entitlement. However, the legislation goes wider than that and applies to all employers and in all cases where it is not reasonably practicable for the worker to take their holiday during the current leave year due to the effects of the coronavirus, including on themselves, their employer, or the wider economy and society.    

What does this mean? 

When is it not reasonably practicable for a worker to take holiday due to the effects of coronavirus?  In particular, do the current lockdown and travel restrictions or the fact that an employee may have been furloughed mean it is not reasonably practicable for them to take their holiday?  

The introduction of furlough and the coronavirus job retention scheme also raised questions about whether an employee can take holiday while furloughed and whether this affects any grant payable under the scheme. The HMRC guidance on the scheme does not deal with holiday.  Instead, Acas has issued general guidance on using holiday during the coronavirus pandemic, which includes some information on holiday and furloughed employees.  

So what does the Acas guidance say?  

Here are some of the key points:

Using holiday

• If an employee is furloughed and the employer intends to claim for their wages under the Coronavirus Job Retention Scheme, the employee can still request and take their holiday in the usual way. This includes bank holidays
• Employees and workers must get their usual pay in full, for any holidays they take     

Carrying over holiday 

• During the coronavirus outbreak, it may not be possible for staff to take all their holiday entitlement during the current holiday year
• Employers should still be encouraging workers and employees to take their paid holiday. Employees and workers should also make requests for paid holiday throughout their holiday year, if possible
• New legislation allows employees and workers to carry over up to 4 weeks’ paid holiday over a 2-year period. This applies to any holiday the employee does not take because of coronavirus, for example if:
  • they’re self-isolating or too sick to take holiday before the end of their leave year
  • they’ve had to continue working and could not take paid holiday
• The employee may also need to carry over holiday if they’ve been furloughed and they cannot take paid holiday because of coronavirus
• If an employee or worker leaves their job or is dismissed during the 2-year period, any untaken paid holiday must be added to their final pay and paid in lieu

Bank holidays

• Bank holidays are usually part of the legal minimum 5.6 weeks’ paid holiday. Employees and workers must get their usual pay in full for bank holidays
• Employees and workers may still be required to use a day’s paid holiday for bank holidays, including when they’re furloughed 
• If employees and workers usually work on bank holidays but are currently furloughed, they should check with their employer to see if they have to take holiday on that day or if they can take the time off at a later date
• If employees and workers cannot take bank holidays off due to coronavirus, they should use the holiday at a later date in their leave year. If this is not possible, bank holidays can be included in the 4 weeks’ paid holiday that can be carried over 

Previously booked holidays

• An employee may no longer want to take time off they'd previously booked, for example because their hotel cancelled the booking. Their employer can insist they still take the time off, but it’s best practice to get agreement from the employee
• If the employee wants to change when they take this time off, they'll need to get agreement from their employer

Requiring staff to take or cancel holiday

• Employers have the right to tell employees and workers when to take holiday
• An employer could, for example, shut for a week and tell everyone to use their holiday entitlement
• If the employer decides to do this, they must tell staff at least twice as many days before as the amount of days they need people to take. For example, if they want to close for 5 days, they should tell everyone at least 10 days before
• Employers can also cancel pre-booked paid holiday. If they decide to do this, they must give staff at least the same number of days’ notice as the original holiday request

Being flexible about holiday during coronavirus

• Employers and employees should be as flexible as they can about holiday during the coronavirus pandemic
• It’s a good idea to:
  • Talk about any plans to use or cancel holiday during coronavirus as soon as possible
  • Discuss why holiday might need to be taken or cancelled
  • Listen to any concerns, either from staff or the employer
  • Invite and suggest ideas for alternatives
  • Consider everyone’s physical and mental wellbeing
  • Be aware that it’s a difficult time for both employers and staff

Implications for employers

The guidance answers many of the questions employers may have about holiday at this time but is not as clear as it might be on some issues. It is also important to remember that the guidance is not binding on employment tribunals and so should be read with that in mind.   

It is clear from the guidance that:

• Employees can continue to take their holiday during the pandemic and employers should encourage them to do so
• Employees can continue to take bank holidays as holidays
• Employees can take holiday while furloughed, including bank holidays
• Employers can require employees to take bank holidays they normally have off, including furloughed employees  
• Employees must be paid their normal full pay when they are on holiday, even if they are furloughed and so may have had their pay reduced 

While not absolutely clear, the guidance appears to suggest that:

• If an employee takes holiday while furloughed, holiday pay is included in the sums the employer can claim for under the job retention scheme. The employer will have to top this up to full pay
• Taking holiday, including bank holidays, will not break a period of furlough. Employees must be furloughed for a minimum period of three consecutive weeks in order to be eligible for wage support.Taking holiday should not affect this 
• Furlough may be a reason why it is not reasonably practicable for an employee to take their holiday and so may result in the employee being able to carry it over 

While the guidance has a section on requiring staff to take holiday, it says nothing about whether an employer can require furloughed employees to take holiday (except for bank holidays). Employers considering doing this should take legal advice. Even where employees are working, employers should also be careful about insisting employees take holiday, particularly during lock down periods and perhaps while travel restrictions continue. The purpose of annual leave is both to give the worker a period of rest from work and to enable them to enjoy a period of relaxation and leisure. While (unless furloughed) an employee will be getting a rest from work, there are strong arguments that in the current circumstances there is little opportunity for relaxation and leisure.    

The Acas guidance is being updated all the time and the information in this update is based on the guidance as at 8 April 2020.  

Click here for the current version.