How to handle annual leave during lockdown

Employees will not be jetting off to sunnier climes soon, so how can HR handle annual leave allowances?

With no real clarity as to when businesses can fully open again or how long lockdown measures will last, it can be challenging to plan employees’ annual leave. Amy Ling looks at employers’ obligations regarding holiday and what they can and can’t ask employees to do. 

Although it has only been a few weeks since lockdown was announced, hopping on a plane for a week by the beach now feels a lifetime away. With some employees now working flat out to keep essential services going whilst others are stuck at home on furlough, how should annual leave be dealt with in a time of coronavirus?

What are an employer’s obligations?

Workers are entitled to a paid annual leave of 5.6 weeks per year. This is made up of four weeks derived from the EU’s Working Time Directive (WTD leave) and 1.6 weeks provided under the UK’s Working Time Regulations 1998 (WTR).

Together, this works out at 28 days for a full-time employee. Many will also be entitled to additional holiday days under their contract of employment.

Employers have an obligation to ensure that, as a minimum, employees take their WTD leave each year. A failure to do so can create exposure to claims for compensation and/or a declaration they should be permitted to take holiday.

Usually, getting employees to take their holiday entitlement is not an issue. However, with so many employees now working from home and unable to travel or visit family, many are reluctant to consider annual leave. Others are unable to book holiday due to the need to continue to work to meet increased demand or provide essential services.

Should we encourage employees to take leave during lockdown?

As a matter of good practice, employees should be encouraged to take their leave proportionately through the leave year, including any period of lockdown.

The fundamental purpose of annual leave is a non-working period of rest and relaxation (rather than foreign travel). It’s important employees take regular breaks away from the demands of the email inbox, customers and targets for their wellbeing and health.

Employees should be prompted to book leave and reminded of the restorative value of simply taking the time to be ‘offline’, even if this doesn’t involve leaving the house.

Can employers dictate when leave is taken?

The WTR allows employers to compel employees to take holiday (unless their policies or employment contracts specify otherwise). To do so, an employer just needs to give notice of the requirement to take holiday which is twice the length of the holiday proposed, so four days’ notice for two days of leave.

Requiring employees to take leave is obviously a less desirable option than encouraging employees to take leave and should be exercised with caution. Employees are not likely to take kindly to being “forced” to take time off and careful messaging should be used to assure them of the benefits of holiday on their own wellbeing.

What about furloughed employees?

Unless agreed otherwise, furloughed employees are still entitled to take holiday and to receive their “usual holiday pay” for this time.

This means those receiving only 80% of their normal pay will typically be entitled to a top up of the additional 20%. When it comes to bank holidays, HMRC’s guidance states that if employees usually take these days as annual leave, they should receive a top-up or day in lieu.

Because employers of furloughed employees only need to fund the top-up rather than the whole holiday day, encouraging (or requiring) employees to take holiday during furlough can therefore be a cost-effective option for employers with sufficient cashflow.

Can we force employees to use up all their holiday during lockdown?

It may be tempting for some employers to compel employees to take all of their annual holiday entitlement during lockdown or furlough on the basis they can return to work in July/August ‘all hands on deck’.

However, this is a risky approach and should be avoided. Aside from a corrosive effect on goodwill and team morale, legal challenges are likely to result. There is even a risk in some circumstances that running down leave entirely could be a breach of the implied term of trust and confidence, giving rise to resignations and claims of constructive unfair dismissal.

It’s worth remembering leave can be managed in other ways. Many employers are asking employees to have taken, say, 40% of their annual holiday entitlement by the end of August (if they have a January to December holiday year).

In addition, there is no obligation on an employer to agree to holiday requests and it’s reasonable to refuse these where there are business needs to be met. If employees are unable to take all their holiday as a result, then they may be able to carry this over to the next holiday year.

What are the new rules on carrying over leave?

At the other end of the spectrum to furloughed employees are those who would want to take holiday but are unable to do so because of the demands created by the pandemic.

In recognition of this, new regulations came into force in March allowing the four weeks of WTD leave to be rolled over for up to two leave years. This is a departure from the usual position, which usually prohibits any roll over of WTD leave from year to year.

Although clearly aimed at those keeping the nation going in these difficult times, the regulations are not restricted just to ‘essential’ or ‘key’ workers.

Any employee will qualify for a roll over if they have been unable to take holiday as a result of the impact of the coronavirus either on them, their family, the wider economy or society.

For example, an employee may find they are not permitted to take holiday whilst furloughed, but upon their return to work business is so busy it’s not possible to take their entitlement before the end of the year.

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Amy Ling

About Amy Ling

Amy Ling is an associate in the employment team at Kemp Little

22 Responses to How to handle annual leave during lockdown

  1. Avatar
    Rob Laidlaw 7 May 2020 at 2:36 pm #

    Can my employer force me to have 5 days holidays whilst on furlough when I’m in lockdown

    • Avatar
      Wilson 17 May 2020 at 11:19 am #

      Yes…..as long as in this case of 5 days leave, they give you a min of 10 days notice of this, before the start of the leave period.

  2. Avatar
    Jason Hallatt 12 May 2020 at 12:02 pm #

    My employer is saying,,in accordance with the working time regulations 1998,,an employer can force an employee to take annual leave. To do this lawfully, employers must give employees twice as much notice of the amount of annual leave they are being asked to take. There saying if anyone who has not returned to work by 25th may will be required to take the last working week as holidays. But if you are back at work now or are requested to return on or before the 25th then please disregard…
    Can my employer force this upon us during furlough under lockdown??

    • Avatar
      Tashy 17 May 2020 at 5:44 pm #

      Jaybo,

      According to the modified terms under the new 2020 amendments to the 1998 act, it seems to be in more our favour rather than theirs. Employees have a right to switch their week to next year rather than be forced to take it. Employers are also bound to the 2020 amendments in the act. Think they are trying to pull a fast one. They only quoted the 1998 act and not the 2020 amendments for coronavirus in the email.

      Jayboooooo

  3. Avatar
    Peter Smith 13 May 2020 at 6:25 pm #

    My employer is forcing me to take all my annual leave while being furloughed. Can’t be right surely.

  4. Avatar
    Janet Elliott 15 May 2020 at 10:40 am #

    I have been furloughed and today 15/5/2020 I received a letter from my employer who pays me the shortfall of 20% that it is compulsory to take 4 Days holiday out of my annual leave from 26 – 29th May and they have agreed that up to 5 days of annual leave can be carried over until 31st August am I allowed to do this?

  5. Avatar
    Svetla Ruseva 17 May 2020 at 4:26 pm #

    I am on furlough pay .On 15/5/2020 my employer required me to take 21 days(out of 28) holiday spread over June,July and August .This is 75% of my holiday to be taken during furlough .Do they have the right to force me to take so many days ? Do I have any legal rights to refuse or to agree for less days holiday?

  6. Avatar
    Stacey 18 May 2020 at 12:29 pm #

    Hi I was was called last week to say I need to use 7 days annual leave and to book by today. I explained the 20% I’m incurring is what I would spend on childcare and due to not currently paying it, financially it wouldn’t work for me.I offered 3.5 days to help the business but the reply I got was that annual leave may not be authorised in future so you may want to think about using more. My annual leave is solely for school holidays I have two children and I am a single parent.

    She also denied that holidays can be carried over. I’m worried if I lose my job those holidays will cost me out of my final wage. Our holidays run from April to April is this seen as legal or reasonable.

  7. Avatar
    Lorraine O'Donnell 19 May 2020 at 2:18 pm #

    If I am working during this lock down period am I able to still request time off within the next two weeks?

  8. Avatar
    george 19 May 2020 at 2:38 pm #

    i was sent home from work on lockdown because i have medical issues. while i was off i had 8 days booked off in april will i lose them 8 days or will my job just pay me because it was them who sent me home. i was happy to carry on working but they said i had to go home because i was at high risk with covid-19. so will i keep my hoilday times thankyou

  9. Avatar
    Emma scott 21 May 2020 at 8:29 am #

    Iv been furloughed and was due to go on holiday fri 22/5. I received a letter saying although i am furloughed i must still take this anual leave is this right?

  10. Avatar
    Justin 21 May 2020 at 1:53 pm #

    I have been told that my employer is going to take 10 days leave off me due to the coronavirus. Is this legal?

  11. Avatar
    Louise 21 May 2020 at 8:40 pm #

    I’ve been told that when I return to work from being furloughed I will loose some of my holiday entitlement. For example if I have 10 weeks off I will loose 7 days. Is this correct??

  12. Avatar
    Jane 22 May 2020 at 1:49 pm #

    Hi,
    My annual leave runs from September to September. I am on furlough being paid 80% of my usual wages right now and work for a large corporate entertainments industry. My employer has informed me that whenever I return to work (if I return to work) that all my annual leave will have to have been be taken. In other words, I am on furlough, but this will be re-termed as annual leave for as many days annual leave that I have left (around 23 including some bank holiday entitlement). They are not going to allow us to carry any annual leave over during the next two years as the Governments relaxation guidelines. There is also speculation that these will be paid at the 80% rate. Seems harsh after 38 years loyal service. Is it actually legal? Many thanks

  13. Avatar
    Peter 26 May 2020 at 2:31 pm #

    I received a message today asking me to come into work on Thursday for some training even though I am furloughed and I then received a further message saying this current week commencing 25th of May must be taken as holiday and I will receive full pay for this week. Can they do that when I havent been given sufficient notice and will technically be working on one of the 5 days ??

  14. Avatar
    Tye 27 May 2020 at 4:15 pm #

    I had a holiday planned for 1 week In May I checked our online system to make sure it had been completed, long story short they were back on

    So I took them off them to be told it was too late as the deadline had passed , I contacted head office and asked the question to have the days removed as holiday as I didn’t want them.,

    They replied saying my orginal request was denied unsure why ! I never received any contract from my piers nor on our online system .
    Are they allowed to do this also what can I do
    Are companies allowed to do that

  15. Avatar
    Ton 28 May 2020 at 7:57 am #

    See I need help the other way round as my employer will not let me take holiday during this lockdown period, which is annoying working full time with no days off.

    • Avatar
      Sarah 30 May 2020 at 9:26 am #

      I’m in the same situation. I have holiday booked in June and have worked right throughout lockdown which has now been extended here in Wales for a further three weeks. How can I get my employer to agree the time off please?

  16. Avatar
    Dorothy 29 May 2020 at 9:56 pm #

    If our company has some (but not all) employees on furlough, are the remaining employees permitted to take one or two weeks leave? We have been told that if we want to take leave we have to be furloughed for the minimum period of three weeks meaning that :-

    – We can have one week holiday (paid at full pay) and two weeks furlough (currently 80%)
    – We can have two weeks holiday (paid in full) and one weeks furlough

    Is this allowed? Is there a reason why we are not able to just take the one or two weeks without having to be furloughed?

    • Avatar
      Dorothy 2 Jun 2020 at 6:55 pm #

      Just as an added piece of info. My employer is not refusing us holiday, but is saying that if we want to take holiday they have got to furlough us for a minimum period. (Government Legislation).

      We have been told that ‘a business’ is not able to give holiday (in increments of one or two weeks only), but that we want to take holiday we can take one week and be furloughed for two, or take two weeks and be furloughed for one – either option equating to the three week minimum period.

      The crucks of it being that we have to ‘out of the business’ for a minimum period of three weeks, some of which ‘must’ be furlough!?

      This apparently is only because half – but not all – the staff are on furlough.

      Any help on this would be gratefully appreciated.

  17. Avatar
    Polly 1 Jun 2020 at 5:31 pm #

    Hi

    My company has asked me to take a weeks holiday during furlough, i understand they are topping up the 80% by the 20% for this, with Regards to the number of days holiday, I would normally take 4 days for a week as I only work 4 days, does this mean that I have only used 20% of a weeks holiday as they have only paid 20%, or have I used a full weeks holiday?

  18. Avatar
    John 2 Jun 2020 at 10:31 am #

    I believe lots of companies will use this to their advantage for saving money and effectively taking from the employee. If someone has to take forced holiday for a month whilst furloughed, the employer will only pay 20% of that holiday cost out of their own pocket, as the government pays the rest. If then the employee is made redundant after the furlough period, the employee looses out on getting that final holiday payment into their final salary, assuming they hadn’t taken any of their holiday (where as at redundancy talks normally that would cost the employer 100% of the holiday payment).
    so the employee only gains 20% whilst on furlough but looses out the 80% when made redundant.

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