COVID-19 and Annual Leave

Published: April 8, 2020

Can I ask staff to take annual leave for a set period?

You can ask your employees to agree to take a period of annual leave. If the employees do not agree, then you may give notice ordering them to take holiday on specified dates. There are no legal requirements about the form that this notice must take, but this notice should be at least twice the length of the period of leave that the employee is being ordered to take. This is also outlined in their terms and conditions of employment.

When staff return to normal working patterns, they will have accrued a lot of annual leave. Can I do anything about this?

Staff will continue to accrue annual leave as normal whilst under contract with an employer. Normally, employees are required to “use or lose” statutory annual leave (5.6 weeks) in the year in which it accrues, unless they are on a form of family leave or, in some circumstances, have been unable to take holidays due to sickness.

One option, to prevent a large amount of annual leave building up without being taken, is to give notice to employees requiring them to take leave (see above). However, to help with this issue the Government has amended the Working Time Regulations to allow statutory holidays accrued this year to be carried forwards for up to two years where it was not possible for staff to take leave due to the COVID-19 outbreak.

The carry-over amount will be limited to four weeks’ statutory leave. Statutory holidays above this amount should be taken this year. Contractual holidays over and above the 5.6 weeks statutory entitlement are a matter for agreement between employers and staff.

Some employers already allow carry-over of leave from one year to the next. An employer could allow for more leave than usual to carry forward or require staff to take holidays this year, whether on certain dates or at the employee’s choice.

Can staff take annual leave to “top up” furlough leave and pay?

 From the Government guidance published to date, it appears that staff on furlough leave must be designated as being absent on those grounds, which would suggest that they cannot be deemed to be on annual leave at the same time. In order for an employer to apply for support with wage costs through the Coronavirus Job Retention Scheme, the staff member must be furloughed for a minimum of three weeks. However, once the minimum period of furlough is spent, the employee could take annual leave for a period.

We continue to wait for definitive guidance from the Government / HMRC on whether annual leave can be used during furlough. As one of the key features of being furloughed is that you cannot undertake work for your employer, which is also the case during a period of annual leave, it has been speculated that it is possible for employees to use up periods of annual leave during furlough leave.

For employers seeking to act now and who are choosing to combine furlough leave with annual leave, please note that if further guidance confirms it is not possible to use up annual leave during furlough leave and reclaim costs through the scheme, you may need to allow the employee to reschedule that leave for later in the holiday year.

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