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Parfitt Cresswell Weekly Employment Law Bulletin 1

Whilst the Coronavirus Job Retention Scheme (Furlough Scheme) has provided a much-needed lifeline for many businesses, this scheme is due to end on 30 June 2020. Take up of the scheme has been very high (with approximately 6 million workers having been furloughed at the time of writing) and this has come at considerable expense to the economy. As the government look at various ways to transition out of this scheme as the lockdown ends, a phased approach with different sectors returning to work at different times appears to be the preferred option.

The key topics that we will be covering in the coming weeks will include the following:

- Annual leave considerations

- Health and Safety requirements upon returning to work

- Changes in working arrangements

- Changes to the workforce upon exiting furlough.

If there are other topics you would like us to cover that may be affecting you, then please do let us know by contacting clientservicesteam@parfittcresswell.com.

This week we will start by looking at issues that may arise around annual leave entitlement, both during any furlough period and beyond.

Annual Leave

Whilst much activity in the country has come to a standstill during lockdown, it is likely that those employees who are working from home or on furlough leave are still accruing holiday. In addition, many employees will have taken less holiday than normal for this time of year due to restrictions on travel, both domestically and overseas. Understandably, workers may be more reticent to take their ‘holidays’ during a period when they are confined to their house for 7 days per week.

This leaves employers with concerns over employees returning to work with higher than usual amounts of accrued annual leave and facing a potential deluge of requests for leave in the later part of this year. At the very time when employers are attempting to get things back on track, they may find themselves with a significantly reduced workforce.

Statutory Entitlements

Workers are entitled to a minimum of 5.6 weeks paid annual leave per year. This is made up of 4 weeks that comes from EU law (the Working Time Directive (WTD Leave)) and 1.6 weeks that comes from the UK’s Working Time Regulations 1998.

For full time employees, this amounts to 28 days annual leave per annum, although this may include bank holidays. Of course, many employers do also give their employees enhanced contractual terms that provide additional days over and above the statutory minimum.

Anticipating that workers may be unable to take all their annual leave in 2020, the government has recently passed emergency legislation that allows the 4 weeks of WTD leave to be carried over where it was ‘not reasonably practicable to take it in the leave year’ as a result of the effects of coronavirus. This includes effects on the worker, the employer or the wider economy.

This carried over leave must be taken in the two years immediately following the leave year in which it was due.

Should employees be encouraged to take annual leave whilst on lockdown?

Employees should be encouraged to take their annual leave proportionately throughout the year, including during any period of lockdown. Annual leave is intended to give a period of rest and relaxation away from work. Even for employees that are working from home, taking their annual leave is still important to their wellbeing.

Can an employer dictate when employees should take leave?

Whilst attempting to encourage employees to book holiday is always the preferred option, the Working Time Directive does permit employers to require their employees to take holiday at certain times of the year, as long as they are given enough notice (twice the length of the holiday proposed). However, before doing so employers should check their contract of employment/policies to ensure that they are permitted to do this.

Can employees take holiday during furlough leave?

Unless it has been agreed otherwise, an employee is entitled to take holiday during any period of furlough leave. This time will be payable at 100% of their normal salary, meaning that employers who have furloughed employees at 80% will have to pay the remaining 20%.

Although an employer could reclaim up to 80% of the annual leave costs, making it an attractive option for those who are able to top up the 20%, for others their financial circumstances during this period may make this option less attractive, as the employer will be required to fund the difference.

Although an employee can choose to take annual leave during furlough, it is possible for an employer to designate furlough as a period where no holiday can be taken (via suitable wording in the furlough agreement), or alternatively they could serve a counter-notice in response to any holiday request that is made by the employee, provided this is done within time.

What about bank holidays?

If employees usually take these days as annual leave, they should be treated as statutory annual leave and therefore be paid in full. In this situation the employer will need to either top up the pay or provide the employee with a day off in lieu (which can be carried forward to the following year).

Can an employer force an employee to take their annual leave during a period of furlough leave?

This is a little more difficult as employers should be mindful of not breaching the implied term of mutual trust and confidence between them and their employees. Caution should be exercised when requiring an employee to take annual leave during furlough or refusing an employee’s request to cancel a previously booked holiday, as this could amount to a breach of trust and confidence by the employer. Much will revolve on the restrictions in place at the time and whether the employee is able to enjoy rest and relaxation during this period.

In most cases it is hoped that employers and employees can reach sensible solutions to resolve any annual leave issues that arise. However, should you have any difficulties or any particular circumstances that you require assistance with, please do not hesitate to contact us on 0800 999 4437 or email enquiries@parfittcresswell.com.