On 13 May 2020, the UK government published guidance on holiday entitlement and pay during the coronavirus pandemic. The full guidance can be found here and, although not legally binding, it provides a useful starting point for employers, particularly those utilising the Coronavirus Job Retention Scheme. This update breaks down some of the most important points.

Holiday entitlement will continue to accrue

Almost all workers are legally entitled to 5.6 weeks’ paid holiday per year. Workers who have been placed on furlough leave will continue to accrue this statutory holiday entitlement, as well as any additional holiday provided for under their contract.

Employers can require workers to take holiday

Employers can require workers on furlough leave to take holiday during the furlough period. The guidance confirms that the usual notice requirements will continue to apply and that by taking holiday, workers will not break the furlough period. If an employer wants to do this, they 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.

Holiday is to be paid at the usual rate

If a worker on furlough takes or is required to take annual leave, an employer must pay the worker what they would usually be entitled to. This means that employers may have to top up a worker’s furlough pay for the days that they are on holiday. As taking holiday does not break the furlough period, employers can continue to claim the 80% grant from the government for these days.

Annual leave can be carried over

Under the new Working Time (Coronavirus) Amendment Regulations 2020, workers can carry holiday forward where the impact of coronavirus means that it has not been reasonably practicable to take it in the leave year to which it relates. When considering what is reasonably practicable, employers should consider factors such as the length of time remaining in the worker’s leave year and the health and wellbeing of the worker. The guidance does suggest, however, that workers who are furloughed are unlikely to need to carry forward annual leave, as in most cases they will be able to take it during the furlough period. An exception to this might be where an employer cannot afford to top up the worker’s pay.

The team will continue to monitor and report on the situation as it develops. If you have any questions please contact Linky Trott, or any member of the Employment team.

To review our previous Covid-19 updates, please click here.


Please note that this blog is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content of this blog.

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