23 June 2020
Flexible furlough scheme – how will holidays be affected?
A few weeks after the Coronavirus Job Retention Scheme (CJRS) was introduced, the Government confirmed that an employee could take holiday without breaking furlough, but the employer needed to top up their pay to normal pay. This means pre-furlough pay for those on furlough; and regular hours or pay based on a 52-week average for those with irregular hours.
The Government also confirmed that employees on furlough could reasonably take holiday during furlough (unless the employer could not afford to top up their pay). Therefore, it wouldn’t be necessary for them to carry over holiday to the next two years - as they had provided for, in the case of employees, who couldn’t take holiday this year due to coronavirus
Some employers, nervous that their employees would all want to take their holiday after the lockdown ends, have been requiring employees to take holiday during furlough. To do this, unless employees give consent, you need to give double the amount of notice as you want your employee to take as holiday. So, for a week’s holiday, you need to give two weeks’ notice. This has enabled employers to reduce their exposure on holiday pay (as the Government contributes the 80%) and to avoid the risk of being left with staff shortages when their business starts to improve.
Holiday and flexible furlough
How does taking holiday fit in with the flexible furlough scheme, starting on 1 July 2020, where the Government will allow employers to bring back their furloughed employers to work on a flexible basis?
Employers can give employees notice to the effect that non-working days are to be taken as holiday. In this way, they reduce their exposure to staff wanting to take accrued holiday when things start to pick up and cut the amount they have to pay for staff holidays, as the Government will be picking up the lion’s share of the costs until the end of October 2020.
Practicalities to consider
It’s important to note that individual employees have to agree to be furloughed, but they might simply refuse.
Unions can also resist attempts by employers to make employees take more leave than they have accrued to date.
It is also important for employers to be aware that there are some limits on how you could make an employee take holiday without crossing a line. Employers need to be careful that they don’t breach the Working Time Regulations, so that employees can actually treat the time as holiday (which not might be possible for shielding employees), or do it in a way that breaches trust and confidence.