There is something of a conundrum being circulated around the effect of holidays on furloughed staff. Whilst we do not advise on employment law we have set out below the issues as we understand them. At present, there appears to be no definitive answer or guidance available but this may be important to your business.
When it comes to employees who have already booked holidays off in advance of being furloughed or in respect of any employees who will be furloughed during the Easter Bank Holidays or May Bank Holidays, the ability to be able to claim under the Job Retention Scheme (JRS) in full or in part may be affected.
It has been stated that whilst an employee is on holiday they cannot be furloughed, instead, they must wait until the holiday has come to an end before the furlough can take place.
Using Easter Bank Holiday as an example, Employment Law Specialists are suggesting that at present there are 3 options to an employer:
Ignore the Bank Holidays as they fall within the furlough period:
In this case, employers will continue to pay the employee as per the furlough agreement and make a claim under the JRS. It is believed that this could bring the employer in breach of both contract and minimum statutory holiday requirements. It could also prevent a claim through the JRS or result in a recovery of a claim at a later date.
Agree to pay the employee the Bank Holiday pay in full:
This should meet the employer’s statutory and contractual obligations. However, this could again prevent the employer from being able to claim under the JRS for any element of the holiday pay and, at worse, break the continuity of the furlough period.
Agree with the employee that the Bank Holidays/Holidays are to be taken at a different time:
This avoids all of the issues detailed in the previous options, it does, however, mean that the employer will need to deal with the accrued holidays once the employee comes back to work. This has been alleviated, to some extent, by the recent Government announcement that it will be possible to carry over up to 4 weeks holiday to be utilised over the next two business holiday reference periods.
This issue definitely needs some more clarification. We suggest that you contact your employment advisor or the ACAS helpline for further guidance. As soon as clarification is given we will share this with you.