On Thursday 26 March 2020, the government passed The Working Time (Coronavirus) (Amendment) Regulations 2020 (the 'New Regulations'). These amend current rules governing the ability of workers to carry over their annual holiday entitlement into the next holiday year.
Background
Under the Working Time Regulations 1998 most workers have an annual statutory holiday entitlement of 5.6 weeks (28 days), comprising:
- core leave of 4 weeks ('Working Time Directive Leave'); and
- additional leave of 1.6 weeks (the "Additional Leave").
Employers can offer holiday over and above the minimum statutory entitlement in the contract. The contract normally sets out the period in which the annual entitlement can be taken (the 'Leave Year').
Workers are already permitted to 'carry over' Additional Leave from one Leave Year into the next by agreement with their employer. However, subject to certain exceptions, or by agreement, the Working Time Directive Leave has to be taken in the applicable Leave Year.
There is an obligation on an employer to ensure that their workers have an adequate opportunity to take their holiday and that holiday must amount to time off. Statutory holiday cannot be replaced with a payment in lieu except on termination.
New provisions
The New Regulations have introduced additional flexibility so that where it was not reasonably practicable for a worker to use as holiday any or all of the Working Directive Leave in a Leave Year due to the impact of the corona virus, they can now carry this over into the next two leave years that immediately follow. It is not clear what circumstances will mean that it was 'not reasonably practicable' to take the leave, but it is assumed where workers were self-isolating, sick or were asked to continue working this will be covered.
An employer can only refuse a request a request to take this leave at a particular time if there is 'good reason' to do so.
Guidance for employers
The New Regulations apply to all workers and so employers should be clear on the approach they intend to take on holiday, in respect of both statutory and any contractual entitlements. As it has recently been confirmed that workers can take holiday whilst furloughed, employers may take the view that it was 'reasonably practicable' for workers to use up a proportion of their holiday entitlement during this period or may mandate that some holiday is taken.
Employers are also required to adhere to their duty to ensure the health and safety of their staff. For those who are still required to work, this includes allowing them to take time away from work for rest and relaxation, especially if they have been under pressure due to the corona virus crisis.
Annual leave and furlough
Government guidance on the furlough scheme now confirms that employees can take holiday whilst furloughed but as holiday pay should be calculated based on normal remuneration, employers will be responsible for 'topping up' the government grant. Ominously, the guidance states that the policy on holiday pay during furlough will be kept under review.
Employers may, on notice, require staff to take holiday during furlough but this needs to be handled carefully. Employers who try to force staff to 'run down' their holiday entitlement during furlough may face claims and future enforcement action by HMRC for an abuse of the furlough scheme. Employers could, however, request that staff take a proportion of their leave during furlough.
More guidance on furlough, annual holiday entitlement and other coronavirus related queries can be found here:
https://employment.howardkennedy.com/post/102g316/coronavirus-job-retention-scheme-and-lay-off-what-employers-need-to-know
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