Furlough and Annual Leave - Getting the Best for Your Business
Here at Danton HQ, we are getting lots of questions about furlough and annual leave. Now that the Government has extended the Coronavirus Job Retention Scheme for a further month, some employees will now furloughed for up to four months.

Here at Danton HQ, we are getting lots of questions about furlough and annual leave. Now that the Government has extended the Coronavirus Job Retention Scheme for a further month, some employees will now be furloughed for up to four months.  So, where does that leave employers and how can you manage annual leave whilst getting the best for your business? We’ve pulled together the most commonly asked questions along with some hints and tips to keep you focussed and on track.  

Even though holidays are being canceled, you still need to ensure that your employees are taking time off. Encourage staff to plan and book their annual leave as normal throughout the remainder of the year.  Good planning will help you manage time off over the next few months and cause minimum interruption to your business. Your employees will need the time to recharge their batteries; it’s not healthy to work for months without taking a few days off. 

Employees on furlough? There’s no reason why you can’t insist that they book some annual leave during this period of furlough. You will need to top up their pay to 100% but during the furlough period, holiday pay will cost your business 20% of the normal cost. We recommend your employees use the amount of time they accrue during the furlough period, for example, one week.  

Make sure you have a clear, unambiguous approach on management of holiday during this pandemic period and for the remainder of the year.  Be fair and reasonable and accept that it is a challenging time for everyone.

 Does annual leave continue to accrue during furlough leave? Yes, it does. As with all other types of leave, annual leave continues to accrue whilst an employee is on furlough.  

Can an employee book holiday whilst furloughed? Yes, they can.  The Government announced on Friday 17th April that employees can be on holiday at the same time as being furloughed.  You must pay your employee their normal wages for the holiday period which may mean ‘topping up’ wages to 100%.  

Can I insist my employee takes annual leave? Yes, you can.  But you need to give sufficient notice to your employee. This means that you must give twice the length of the holiday as notice.  So, if you need your employee to take one week’s holiday, you must give a minimum of 2 weeks’ notice.  

My employee has asked to cancel their annual leave. Do I have to accept the cancellation? No, you don’t have to accept the cancellation although the employee may feel disappointed that they won’t be able to make best use of their time off work.  This is a balance between keeping your team motivated and what you may prefer for your business.  If you can accommodate the request, allow your employee to cancel their holiday. 

My business is really busy at the moment.  Can I refuse a request for annual leave? Yes, you can, but we’re in particularly challenging times at the moment. Before you refuse a request, find out more about the reason for the holiday request.  It may be that your employee is struggling with childcare or other caring responsibilities.  If you can accommodate a request for holiday, you should approve it where possible.  

Can I ‘lock down’ certain days so that no one can take annual leave? Yes, there may be days where you simply cannot run your business without all your staff and you can lock down days so that no one is able to book time off.  Always give as much notice as possible in these circumstances. 

My employee has reported sick but they were meant to be on annual leave? Can they ask for the time back? Yes, if an employee reports sick during a holiday period, they can ask for the days they were unwell to be credited back to them.  You may decide to ask for evidence of illness such as a medical note before crediting back the time.  But remember, if the absence is COVID-19 related, most GPs and surgeries are asking employers to exercise discretion in requiring the normal medical evidence of a fit note.

My employee has received a letter saying they should shield for 12 weeks. Can they go on annual leave at the same time? Yes, they can. Whilst your employee is shielding they will be entitled to statutory sick pay but they may request holiday at the same time.  In these circumstances, you will switch your employee from being on sickness absence to being on holiday and will amend their pay to reflect the changes. 

How much do I pay my employee whilst on annual leave during a furlough period? Your employee should be paid their normal wages for the period of annual leave. This will mean topping their pay up to 100% if they are in receipt of 80% wages. 

My employee has already asked if they can carry forward annual leave from this year to next year. Is that allowed? The Government have already said that employees can carry forward untaken annual leave for the next two years. However, a word of caution here.  In most instances, there should be no reason why an employee shouldn’t be able to take their full annual leave entitlement during the relevant year.  It’s most likely that this change in employment law was designed with keyworkers and others who have worked throughout the lockdown period and unable to take leave. The Government have said that they will keep the annual leave policy under review.

How we can help your business – we’re here to help take the headache away so you can focus on your core business.  Whether it’s high level or detailed advice, get in touch. Call us today on 01527 306 760.