Furlough Leave and Annual Leave

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Furlough Leave and Annual Leave

Just after 5pm on Friday 17th April, the government provided us with the first detail regarding employees being on annual leave during furlough leave.
At the time of writing (Monday, 20th April), the government has only updated its Employee Guidance and not its Employer Guidance and has been very clear to say that its position regarding annual leave and furlough is going to be continually under review. This indicates that there are likely to be further updates and changes as we move forward.
The updated Employee Guidance makes clear that an employee CAN take holiday whilst on furlough leave. Any holiday taken must however, be topped up to 100% of their normal pay by the employer. Where an employee’s rate of pay varies, the “normal pay” must be calculated on the basis of the average pay the employee received in the previous 52 working weeks. Employees should effectively receive their “normal” holiday pay for any holiday taken whilst on furlough leave.
Employers will retain a flexibility to refuse requests for annual leave on the basis of business needs however, we don’t yet know if an employer can require an employee to take annual leave during furlough leave at the government’s expense.
When it comes to bank holidays, if an employee normally works bank holidays then an employer can agree that this is included in the grant payment. When the employee doesn’t normally work bank holidays and normally takes them as annual leave then the employer would either have to top the pay up to the usual holiday pay or, give the employee a day of holiday off in lieu. Again, we don’t yet know if employer can require employees to use annual leave to cover would be bank holidays during furlough leave.
Howarths are keeping a constant close eye on all developments and as soon as we hear more, we shall let you know. In the meantime, if you would like to understand how this most recent development may affect your business please contact the Employment Team on 01274 864999.
The government’s most recent guidance for employees can be found here:

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