Employers can require workers to take holiday and cancel workers’ holiday, provided enough notice is given, and furloughed workers continue to accrue statutory holiday entitlements, it has been confirmed in newly published government guidance.
The Department for Business, Energy and Industrial Strategy (BEIS) has clarified that workers on furlough can take holiday without disrupting their furlough. The notice requirements for employers requiring a worker to take leave or to refuse a request for leave continue to apply. Employers should engage with their workforce and explain reasons for wanting them to take leave before requiring them to do so, states the document.
The fears of agency employers have been allayed by the guidance. Agency workers will continue to accrue holiday on furlough as they would normally when between or otherwise not working on assignments, the guidance specifies. “Where a furloughed agency worker takes holiday, the employer who has placed the agency worker on to furlough may continue to claim the grant from HMRC. The grant can cover up to 80% of the worker’s wage cost, with the employer liable for holiday pay above this figure,” states BEIS.
Emergency legislation passed in March has, says the government, given businesses the flexibility they need to respond to the coronavirus pandemic and protected workers from losing their statutory holiday entitlement (the Working Time (Coronavirus) (Amendment) Regulations 2020).
These regulations enable workers to carry holiday forward where the impact of coronavirus means that it has not been reasonably practicable to take it in the leave year to which it relates.
Where it has not been reasonably practicable for the worker to take holiday because of the effects of coronavirus, the untaken amount may be carried forward into the following two leave years, the guidance underlines. When calculating how much holiday a worker can carry forwards, employers must give workers the opportunity to take any leave that they cannot carry forward before the end of the leave year.
The guidance states that the Coronavirus Job Retention Scheme (CJRS) does not alter the position as to whether or not agency workers, including those working through an umbrella company, are entitled to accrue holiday under the Working Time Regulations.
Neil Carberry, chief executive of recruitment industry body REC, welcomed the guidance enthusiastically: “It has taken time and effort, but we are really pleased to see this new guidance from the government. It confirms the status of holiday pay accrual for temps and will hopefully remove the huge cost barrier to higher rates of furlough that many agencies faced before now. It is now clear that holiday pay does not accrue for those temps who are on a contract for services at all.
“The guidance also confirms for those on contracts of employment, holiday will accrue as per their contracts, treating furlough as the same as a period not on assignment. Any holiday pay that does accrue because of the unique terms of individual agencies, can be reclaimed at 80% under the CJRS. We’ll look at what further steps can be taken to support these firms.”