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Coronavirus News: Annual Leave for Employees during Lockdown

Coronavirus News:  Annual Leave for Employees during Lockdown

Which obligations do employer’s need to comply with?

  • Workers are entitled to paid annual leave of 5.6 weeks per year. This consists of 4 weeks as per the EU’s Working Time Directive, and 1.6 weeks as per the UK’s Working Time Regulations 1998.

  • In total, there is an entitlement of 28 days annual leave (for a full-time employee). However, there may also be an entitlement to additional holiday days, depending on what is included within an employee’s contract of employment.

  • Employers are obligated to make sure that employees take their Working Time Directive leave each year, as a minimum. If employers fail to comply with this obligation, they can be exposed to compensation claims, and/or a declaration that an employee should be permitted to take their annual leave.

  • In general, ensuring that employees use up their holiday entitlement is not usually a problematic task. However, as many employees are now working from home, they are reluctant to consider using their annual leave. On the other hand, some employees are entirely unable to use their annual leave, due to the need to continue to work in order to meet increased demand or to provide essential services.

Should employees be encouraged to use their annual leave whilst in Lockdown?

Generally, employees should be prompted to use their annual leave in a proportionate way throughout the holiday year. This includes the lockdown period.

The key point of annual leave is for an employee to have a non-working period of rest and relaxation, rather than for travelling abroad. It is vital that employees take regular breaks away from work related demands for their own wellbeing.

Employees should be encouraged to book leave and be reminded of the value that being away from work has on their wellbeing, even if they must remain within their own homes during this time due to lockdown.

Can employers tell their employees when to take their annual leave?

The Working Time Regulations allow employers to compel their employees to take their annual leave (unless they have policies or employment contracts that say otherwise). In order to do this, an employer must give the employee notice of the requirement to take holiday. This must be done in a timeframe which is twice the length of the holiday proposed, i.e. for annual leave consisting of two days, the employee must be given four days’ notice by their employer.

Requiring employees to take their annual leave is of course not an ideal scenario. It is always preferable for an employee to be encouraged rather than compelled, which is why employers need to proceed with caution here. Employees will most likely feel unhappy about being instructed to take their annual leave. Employers must therefore tread carefully when doing so, and ensure that an employee is reassured that such a request is being made to aid their wellbeing.

How are furloughed employees affected by this?

Unless otherwise agreed, furloughed employees are still permitted to take their annual leave as normal and will receive their usual pay for any annual leave taken.

This would mean that any employee receiving only 80% of their normal pay would be entitled to a top up of the additional 20%.

In respect of bank holidays, HMRC’s guidance says that if an employee would usually take a bank holiday as annual leave, their employer would need to provide them with a day in lieu, or a top up.

As employers of furloughed staff are only entitled to top up the 20% of the annual leave day, rather than the whole day, encouraging, or compelling, employees to take their annual leave during the furlough period can work out to be more cost effective for employers with adequate cashflow. However, as per recent government guidance, it has been shown that if an employer requires a worker to take holiday whilst on furlough, the employer must consider whether the employee is under any restrictions – i.e. the need to socially distance or self-isolate. If an employee is under these restrictions, being made to take annual leave would prevent the worker from resting, relaxing and enjoying leisure time, which is the fundamental purpose of holiday.

Can employees be forced to use up all of their annual leave during Lockdown?

Employers may find this notion appealing (as employees would then have no further annual leave entitlement for the rest of the holiday year once lockdown is lifted), but taking this approach is highly discouraged.

Apart from having a very negative effect on the employee, and the employer’s relationship with them, this scenario would most likely lead to numerous legal challenges. There is even a risk in some circumstances that forcing an employee to use up all of their annual leave could be a breach of the implied term of trust and confidence, giving rise to resignations and claims of constructive unfair dismissal.

Employers should remember that annual leave can be managed in other ways. Many employers ask that their employees ensure that a certain percentage of their annual leave is used up by a particular month i.e. 50% by the end of September, but this will of course depend on the months an individual employer’s holiday year runs from.

Additionally, employers are not obligated to agree to their employees annual leave requests. It can be reasonable to deny an employee’s request if there are business needs to be met. If employees are not able to take all of their annual leave due to this, they may be able to carry their leave over to the next holiday year.

What is the new guidance in respect of carrying over annual leave?

Certain employees may find themselves in a situation where they want to take their annual leave but they are not able to do so due to work demands caused by coronavirus.

To account for this, new regulations came into force in March allowing the four weeks of Working Time Directive leave to be rolled over for a period of up to two holiday years. This is a big difference from the normal stance, which usually prevents Working Time Directive annual leave being rolled over from year to year.

Although this guidance is aimed at key workers and essential workers, this does not mean that the guidance is limited to these specific groups. Any employee will qualify for a roll-over of their annual leave if they have been unable to do so as a result of the impact of the coronavirus on them, their family, the wider economy or society.

For example, an employee may be in a position where their employer does not allow them to take their annual leave whilst furloughed. However, when they return to work, they may find that they are unable to take all of their annual leave entitlement before the end of the year due to work demands. This employee would therefore be able to benefit from the roll-over of annual leave.

Written by Satinder Kaur, Employment Team

If you are trying to calculate annual leave for employees and need supportive advice about Lockdown or any employment matter, please contact any of our Solicitors in the Employment Team at Lawson-West Solicitors.
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