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14 May 2020

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Update – Annual Leave for Furloughed Employees

Posted by: Russell Brown

Yesterday the government published guidance on how workers’ entitlement to holiday and holiday pay is affected during the COVID-19 pandemic.

It states that workers continue to accrue holiday during furlough leave which was widely considered to be the case in just the same way as employees do whilst on maternity and sick leave.

It also states that workers can take annual leave whilst furloughed without bringing the furlough leave period to an end, meaning that employers can still claim the grant under the Coronavirus Job Retention Scheme.

In a reference to European Court of Justice (ECJ) law however the guidance states that whilst taking annual leave, “the employer should consider whether any restrictions the worker is under, such as the need to socially distance or self-isolate, would prevent the worker from resting, relaxing and enjoying leisure time, which is the fundamental purpose of holiday.”

The significance of this is that under ECJ Law the purpose of annual leave is to allow a period of relaxation and leisure. The government guidance therefore acknowledges that there could be certain cases where an employee could argue they were prevented from doing this during a period of “annual leave” due to lockdown related restrictions imposed on them. An example of this could be where an employee is shielding and tries to argue that they cannot relax due to the stresses of being restricted to their home.

The guidance goes on to confirm that holiday pay must be “the correct holiday pay in accordance with current legislation” based on normal remuneration ie not 80% but that employers can still claim up to 80% or £2500 per month under the CJRS.

Finally, the guidance also addresses the issue of carrying over accrued annual leave into subsequent years. Specifically it states that for furloughed staff this ought not to be a problem as they can take it whilst furloughed and in the case of others, it is best practice to allow workers to take it at the earliest possible opportunity where it wasn’t reasonably practicable for them to have taken it in the current annual leave year due to COVID-19 related circumstances.

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Russell is a Partner and Head of Glaisyers' Employment Team.

Russell Brown - Partner

To discuss how Glaisyers can assist you contact Russell Brown on Russell.Brown@glaisyers.com or via 0161 832 4666.

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