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8th April 2020

COVID-19: Annual leave, bank holidays and furlough

8th April 2020

COVID-19: Annual leave, bank holidays and furlough

Clive Dobbin

Posted: 8th April 2020

T: 023 8048 2370

E: Email Me

In light of the upcoming Easter weekend, this blog discusses how annual leave, and in particular bank holidays, should be dealt with under the Coronavirus Job Retention Scheme. Since this blog there have been several updates from government. You can read the details in our new guidance on furlough and annual holidays which was updated on 20 May.

Annual leave whilst on furlough

Although the government released updated guidance on 4 April 2020 in relation to the Coronavirus Job Retention Scheme, the interaction between annual leave and furlough remains unclear. In particular, it is unclear whether employees can take holiday during furlough, and if they can, what rate of pay should they receive (i.e. should it be their normal rate of pay, or can it be paid at 80%).

The ACAS Guidance has, however, been updated and does say that employees can take holiday whilst on furlough as normal. This is certainly our view.

We also believe that when holiday is taken it should be paid at the employee’s normal rate of pay, and should not be reduced to the temporary amount of 80% which can be paid during furlough. Therefore, where an employee is being paid 80% of their normal wages, it may be advantageous for them to take holiday, as they can then ‘top up’ their pay to their normal (100%) pay.

However, it is less clear whether an employer can require an employee to take holiday. If this is possible, then the normal notice provisions would still apply, of twice the period of leave that the employer is asking the employee to take. Therefore, to require an employee to take 1 week of holiday would require 2 weeks’ notice.

But to allow an employer to require an employee to take holiday is open to abuse. If the employer is topping up the employee’s wages from 80% to 100%, to require an employee to take holiday whilst on furlough is essentially asking them to give up holiday. To prevent this abuse we could see a situation whereby an employee can take holiday if they want, but an employer not being able to require an employee to take holiday. This is similar to the situation which applies where an employee is on sick leave. However, the guidance certainly doesn’t say this at the moment, and it would require further guidance, or legislation, from the government before this was the case.

In summary, for the moment, it appears that an employee can ask to take holiday whilst on furlough. Further, whilst it is unclear, the current ACAS guidance suggests that an employer can require an employee to take holiday, by giving the appropriate period of notice, but this point is less clear as it could be open to abuse.

Bank holidays

What about bank holidays, particularly with the Easter bank holidays of Good Friday and Easter Monday, coming up?

Under the Working Time Regulations, most employees and workers have a right to a minimum of 5.6 weeks paid annual leave. This equates to 28 days a year for a full-time employee. Whilst it is common for employers to express the holiday entitlement as a number of days plus bank holidays (e.g. 20 or 25 days plus bank holidays), under the Working Time Regulations bank holidays aren’t specifically recognised and effectively they are just part of the employee’s normal holiday entitlement, with just the employer having specified that holiday is to be taken on those days.

Again, the ACAS guidance suggests that employees and workers may still be required by the employer to use a day’s paid holiday for bank holidays, including when they are furloughed. If bank holidays are just part of an employee’s normal holiday entitlement, and as suggested by ACAS employees can take, and be required to take, holiday as normal during furlough then this would certainly appear to be correct.

If effectively bank holidays are simply part of an employee’s normal holiday entitlement, but just a day on which the employer has required the employee to take holiday, then an issue could arise if the notice to put an employee on furlough cancels out any holiday scheduled to be taken. If this is the case, then the employer or the employee would have to request again for the bank holidays to be taken. As outlined above, it is less clear as to whether an employer can require an employee to take holiday during furlough leave. If the answer to this is no, then it may not be possible for an employer to require an employee to still take the bank holidays as normal. If this is the case, then the employer will have to allow the employee to take the holiday due to be taken on the bank holidays later in the year. However, this will simply increase the amount of holiday than employees need to take when businesses return to normal, and so we are suggesting to employers that they treat the bank holidays as normal holiday, and therefore pay for these two days at the normal rate of pay.

If you would like further guidance in relation to this topic, please contact a member of the Employment team.

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34 Comments

    • Paris Smith

      Thank you for leaving your feedback Amunah. We are glad you found the article helpful.

      Sandy

      Reply
  1. Susan Nichols

    Very helpful, thank you.
    Clearest explanation I have seen yet, during troubling and difficult times for small employers

    Reply
    • Paris Smith

      Hi Susan
      Thank you for your comment. We are very pleased you have found the article useful.

      Sandy

      Reply
    • Paris Smith

      Hi Peter. Thank you for your comment. I’m glad the article has helped you.
      Kind regards.
      Sandy

      Reply
  2. Marie Short

    My husband has just been put on Furlough, he has been told that for every week he is on Furlough he will lose 1 days paid holiday. Can you comment on if this is legally correct please?

    Reply
    • Paris Smith

      Hi Marie
      Thank you for your enquiry. No, its not legal to say that you will lose 1 day’s holiday for each week you’re on furlough. However potentially what your employer can do is require you to take one day’s holiday during each week you’re on furlough, but if they do this, then the day’s holiday should be paid at your full (normal) rate of pay and not the 80% under the furlough scheme.
      I hope this helps.
      Sandy

      Reply
  3. George

    Hi, my wife works for an employee owned company and they are trying to get her to agree to a reduction is holidays allowance for this year, is this legal?

    Reply
  4. Michelle

    hi my partner has been paid today and only had his 80 percent but the bank holiday is also 80 percent is this correct or should it be a full days pay

    Reply
    • Paris Smith

      Hi Michelle

      Thank you for your enquiry. Please read our latest blog posted this morning https://parissmith.co.uk/blog/coronavirus-furlough-holiday-update/.

      Here is an extract from the blog where the government talks about bank holidays:

      the government has also clarified the position with regard to bank holidays. If employees normally have bank holidays off, the guide says that the employer will either have to top up the pay to the usual rate of holiday pay, or give employees a day of holiday in lieu. Therefore, for the recent Easter weekend, if employers want the bank holidays to still be treated as holiday, then they should make sure that they top up the pay of their employees to normal pay for those two days, but only claim back the 80% under the government scheme.

      I hope this helps your query.
      Sandy

      Reply
  5. Mr William John hodson

    I was furloughed on good Friday & Easter Monday when I return back to work will I be entitled to get 2 extra days holiday for them later in the year

    Reply
    • Paris Smith

      Hi William

      Thank you for your enquiry.

      Bank holidays are not separately recognised in terms of employment law, and are just part of your normal holiday entitlement, but days when your employer has asked you to take holiday. Its unclear whether an employer can require you to take holiday whilst on furlough, and so its unclear whether your employer can require you to take the bank holidays as normal. However the ACAS guide suggests that bank holidays can be taken as normal during furlough. If this is the case, then you would be entitled to full, normal, pay for the bank holidays over Easter, and you wouldn’t be able to ask to take those two days at a later time.

      We hope this helps with your query.

      Kind regards.

      Sandy

      Reply
  6. Cooper Tina

    I work for a large medical practice and they have told me that they require everyone to work on 8 May, a bank holiday; the surgery is normally closed every bank holiday, and our annual leave entitlement is calculated as xx days annual leave, plus bank holidays. I’m going to be giving my 1 months notice tomorrow and I’ve calculated my leave entitlement up to end May, to tie in with my notice period so (a) I can’t ask at the moment, as it would be extremely awkward, and (b) I want to know if I should be paid for extra hours working, at bank holiday rate, or if I should be entitled to TOIL??

    Reply
  7. Paul

    How can I be sure that my employer is paying my 28 days holiday at 100% of my normal pay and not robbing me of holiday entitlement/pay?

    Reply
    • Paris Smith

      Hi Paul

      For your employer to require you to use up your holiday they will have to give you notice (of twice the period of leave they are asking you to take, so 1 week’s holiday requires 2 weeks’ notice). Therefore if your employer hasn’t given you notice then they won’t be able to treat the period as holiday, and so won’t be able to use up your holiday entitlement.

      Reply
  8. Ruhul Amin

    Hi I work for a private parking company today i received my payslip but cant see the bank holidays payment not my paid PCN. but had received 80% of total payment according to government guidelines.
    What is the situation in the farlounge Can you pls explain me by law Am I entitled for my Full Bank holidays payment.
    Thanks
    Ruhul

    Reply
    • Paris Smith

      The government guide to furlough, and the ACAS Guide, both suggest that if the bank holidays are still take as holiday then you should receive full pay for those two days over Easter. So I would query it with your employer, and refer them to the ACAS Guide

      Reply
  9. Emma

    My company put me on furlough for 3 weeks but asked me to take 1 week holiday and 2 weeks on furlough. Is it legal?

    Reply
    • Paris Smith

      Hi Emma

      Thank you for your enquiry.

      Whilst it appears clear that an employee can choose to take holiday whilst on furlough, it is less clear whether an employer can require an employee to take holiday. However the ACAS guide suggests that this is possible. If this is correct, then your employer could require you to take 1 week’s holiday during furlough – subject to giving you sufficient notice, which for 1 week’s holiday is 2 weeks’ notice. However if you are required to take holiday, then for the period taken as holiday you should be paid normal pay, and it shouldn’t be reduced to the 80% which is recoverable from the government under the furlough scheme.

      We hope this answer helps you.

      Reply
  10. Dave

    Hi I’m currently furloughed, not on salary and get payed on a square meter in construction, my company are just paying all the lads a random amount and not paying us 80% of our average, also we have been told they are taking 1 day holiday each week and only getting roughly around 80% of our wage, are they allowed to do this ?

    Reply
    • Paris Smith

      For individuals who earn variable amount, then you should receive either 80% of the average over the last 12 months, or your earnings in the corresponding pay period last year (so for May 2020 it would be May 2019). Then for holiday, the ACAS guide suggests that you can be required to take holiday whilst on furlough – but that should then be paid at your full rate of pay.
      We hope this helps.

      Reply
  11. Catherine Mcgair

    Hi my husband was due to take 6 days holiday in april but was put onto furlough pay in march he recieved 5 days holiday pay today but no furlough pay if he was at work he would have recieved his normal weeks wage along with his 5 days holiday pay is this legal for his company to not pay the goverment furlough wage thanks

    Reply
    • Paris Smith

      Hi Catherine

      I am not quite sure I understand your question. When an employee takes holiday they are entitled to holiday pay. They don’t get holiday pay in addition to their normal rate of pay. Therefore when you take holiday whilst on furlough you should receive holiday pay for that period (but then the holiday pay should be paid at your normal, full, rate of pay and not the 80% recoverable under the furlough scheme. However if I’ve misunderstood the question then feel free to contact any member of the employment team who would be happy to advise on your specific circumstances.
      Thank you.

      Reply
  12. Gerrard mckenna

    My company has told me they are to pay bank hols during furlough..should I be paid a full days money for this and then 80 percent of remaining 4 days because I’m only getting 22 pound for bank hol ..when it would be over 100 in normal circumstances..I would appreciate a response when possible..many thanks

    Reply
    • Paris Smith

      Hi Gerrard

      The ACAS Guide makes it clear that if holiday is taken whilst on furlough then it should be paid at the normal (full) rate of pay. Therefore you should be paid full pay for the bank holiday, and then the 80% for the remaining days when you were on furlough. The company can recover 80% of the bank holiday payment under the furlough scheme – but that process should not affect, or delay, the payment to you.

      Reply
  13. Graham bailey

    While I was on furlough for easter bank holiday monday/tuesday I only got paid 80% I queried this and the company said that my pay was correct I said I’m entitled to take 2 days in lieu they said you won’t get paid for those days whose correct on this me or the company. Also on ve day we finish at 1 o’clock on fridays am I entitled to get a full days pay for this 8 1/2 hours as bank holidays are full days not 1/2 day

    Reply
    • Paris Smith

      Your employment is entitled to require you to take the bank holidays as holiday, in the normal way. However if you are taking it as holiday then it should be paid as holiday, and not as furlough pay. Whilst the position is not entirely clear, the ACAS guide then says that this should be at full pay

      Reply
  14. TREVOR HOWARD

    Is it legal for an employer to deduct 1/2 a days holiday for each week you were off during furlough

    Reply
    • Paris Smith

      Your employment cannot unilaterally reduce your holiday entitlement, and can only do this with your agreement. Your employer can ask you to take holiday whilst on furlough – but if they do, then the ACAS guide says that the time spent on holiday should be paid at your normal, full, rate of pay

      Reply
  15. Malcolm

    Hi Clive. Thank you for your blog. Is it really true that “This is similar to the situation which applies where an employee is on sick leave.”? It may be analagous where the employee is furloughed because they are vulnerable or extremely vulnerable. But a healthy employee on furlough is having a break, can leave their bed, can probably walk, read, enjoy the sunshine – many of the activities one would do on holiday but which an employee on sick might not be able to do.

    Reply
    • Paris Smith

      Sorry I was making a slightly different position. I was not questioning the quality of the time off. Instead I was saying that if an employee is sick, the law says that the employee can choose to take holiday, but can’t be required to take holiday by their employer – I was therefore saying if an employee on furlough can take holiday, but can’t be required to take holiday, this would be the same. However the latest guidance from the government has made it clear that an employer can require their employee to take holiday whilst on furlough https://parissmith.co.uk/blog/furlough-and-holidays-update-20-may-2020/

      Reply

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Clive Dobbin

Posted: 8th April 2020

T: 023 8048 2370

E: Email Me