How To Manage Annual Leave Requests After Furlough
With the coronavirus pandemic, some employees will be on furlough meaning they are not working. However, it is important for employers to note that employees who are on furlough still accrue annual leave. This is because the contract of employment continues during this period.
Employees are permitted to take annual leave while on furlough, without their furlough period coming to an end. If they choose to do so, the organisation will need to top up their pay to 100% of their normal wages if they are receiving reduced pay while on furlough.
Dealing with Excess Annual Leave
As the UK draws closer to the end of lockdown and employees return to the workplace from furlough, managers may be in a situation where a number of employees will ask to take annual leave at the same time, particularly when they have leave to take before the end of the leave year. Where possible managers should allow the leave however, they need to ensure business continuity therefore they will need to balance the employee’s request about the timing of leave against the needs of the business.
Line managers may wish to require employees to take annual leave during furlough, for example to avoid a build-up of leave that employees will need to take when they are back at work. If an employer requires an employee to take annual leave while on furlough, the employer should consider whether any restrictions the employee is under, such as the need to socially distance or self-isolate, would prevent the employee from fully utilising their annual leave for the purpose of resting, leisure time etc. Managers should be aware of the company’s approach to annual leave for the period of furlough before making any decisions.
Standard employment law provisions state that employers can require employees to take annual leave as long as they give twice as many days’ notice as the period of leave the employee is required to take. For example, if the employer requires the employee to take two week's annual leave at a certain time, the employer must therefore give the employee at least four weeks' advance notice (or what is outlined in the contract of employment).
Bank Holidays & Furlough
Where a bank holiday falls within an employee’s period of furlough and the employee would have usually worked the bank holiday, their furlough will be unaffected by the bank holiday. However, if the employee would usually have had the bank holiday as annual leave, the employer should either pay the employee in full for a bank holiday or allow them to take a day's annual leave at a later date.
If a worker on furlough takes annual leave, an employer must calculate and pay the correct holiday pay in accordance with current legislation. It is not permitted for an employer to buy out an employee's statutory annual leave entitlement, i.e. give the employee a cash substitute (except on termination of employment). This prohibition on buy-out applies to the entire period of statutory annual leave, i.e. 5.6 weeks. Where an employer grants annual leave in excess of the statutory minimum, the employer is free to make its own rules and arrangements regarding buy-out in respect of the portion of annual leave that exceeds the 5.6 weeks.
To prevent workers losing their holiday and to enable key workers to keep working, the normal rules on carrying over annual leave have been modified. The Government has amended reg.13 of the Working Time Regulations 1998 to allow workers to carry over up to four weeks' annual leave into the next two holiday years, where it has not been feasible for them to take it as a result of the effects of coronavirus. These amendments to the Working Time Regulations 1998 apply to all employees.
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