Many industries are gearing up to reopen on 12 April, bringing furlough to an end for thousands of employees.
As Prime Minister Boris Johnson provides hope that borders may reopen on 17 May, these employees may be wondering how their previously furloughed status will affect their annual leave entitlement.
Can employees expect to have their holiday days carried over or will they have to forfeit holiday days because of the unprecedented situation that the pandemic has created? And how has the pandemic affected employers’ legal responsibilities regarding furloughed workers’ leave?
Currently, almost all full-time workers, including agency workers with ‘worker status, irregular hours workers, and workers on zero-hour contracts, are entitled to 28 days holiday, which includes eight days of bank holidays. Part-time workers are entitled to the same rate on a pro-rata basis.
However, the majority of this entitlement cannot be carried between leave years, meaning workers lose their holiday if they do not take it. This is because the entitlement to paid holiday is considered a piece of Health and Safety legislation, from which employees and workers cannot resile by ‘selling’ the holiday, except when leaving employment.
Furloughed workers have had the right to accrue holiday entitlement while they were on temporary leave because of Covid-19 (Coronavirus). They could also take leave while on furlough. In addition, new measures were recently introduced by the former business secretary, Alok Sharma, in which workers who have not taken all of their statutory annual leave entitlement will now be able to carry it over into the next two leave years. The Working Time Regulations 1998 have recently been amended to encompass these changes.
These new provisions apply only to the ‘statutory’ parts of annual leave: Regulation 13 and Regulation 13A. The additional eight days leave under Regulation 13A have always been amenable to being sold by the worker or carried over and there is no indication that this will change. The same applies to any extra contractual leave that the worker may enjoy. The Regulation 13 leave however must still be taken as holiday even if carried over.
It will be up to employers to decide how to deal with this accrued Regulation 13 leave that has not been taken due to Covid-19. It will be up to individual employers and employees whether they wish to buy out or sell the remaining eligible leave.
Victoria von Wachter is a barrister at 5 Essex Court