Furlough, Forcing Holidays and Entitlement to Carry Over…

Can we oblige our employees to take annual leave in furlough and can we refuse to cancel or cancel any pre-booked they have?

In short, the answer is yes to all three.

The entitlement to oblige employees to take annual leave is sometimes contained in an employee’s contract of employment. However, where there is no such clause, employers are entitled to force an employee to take annual leave pursuant to the Working Time Regulations 1998, in particular Regulation 15 & 13. 
 
The entitlement under Regulation 15 is however on the caveat that the employer gives the required advance notice. The notice required is a ‘minimum' of twice as many days as the number of days' holiday that the employer wishes the employee to take. So, for example if an employer wishes an employee to take 2 days annual leave they are required under the Regulations to give 4 days notice.

Alternatively, if an employer wishes to cancel pre-booked annual leave then the same caveat applies that notice should be twice as many days as the leave. So, if the employee has a two-week holiday booked an employer would need to give 4 weeks notice. These provisions may, however, be varied or excluded by a clause in an employment contract so it’s important to bear that in mind.

However, the Government Guidance regarding annual leave on furlough says: 

If an employer requires a worker to take holiday while on furlough, the employer 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.

If an employer does wish employees to use their holiday while furloughed, it would be best to seek their agreement to this, rather than forcing upon them a period of annual leave. It may be that Employees who are in receipt of reduced pay may be happy to take annual leave while they are furloughed, as this will see an increase in the funds they receive.

However, not all employees will agree and there may be a justifiable business reason why an employer needs an employee to take leave and if that is so it would be sensible for employers to keep notes of the business reason why they wish their employees to use their holidays in such time. 

It would be important in our view to assess each case on its own merits and whilst there is a statutory entitlement for employers to oblige employees to take annual leave with the only caveat being the notice period, any unreasonable use of Regulation 15 may be seen as a breach of mutual trust and confidence entitling the employee to resign and claim constructive dismissal. Therefore, employers should only do so in a period of furlough where they have genuine reasons for doing so. 

The provisions also apply to requests to cancel annual leave. There is no obligation on an employer to cancel any pre-booked annual leave and can force the employee to take the leave as requested.

 However, where employers are obliging employees to take holidays or refusing to cancel any pre-arrange leave days, we are of the view that they should be wary of potential discrimination contrary to the Equality Act 2010. If for example the employee is shielding, or disabled and an employer wishes to oblige them to take some of that time as leave this may amount to disability discrimination. Particularly, if employees are disadvantaged as a result of such obligations, employers may find themselves liable, as those deemed to be clinically vulnerable under the Government Guidance and advised to shield, may also be classified as having a disability under the Equality Act 2010.  A person is disabled within the meaning of the Act if they have a physical or mental impairment that has a ‘substantial’ and ‘long-term’ negative effect on their ability to do normal daily activities. Generally speaking, this is a low burden to surmount. It may be that those employees cannot enjoy their time as well as those employees without such protected characteristic as they have been advised to stay home or have to strictly adhere to social distancing, or they may be unable to wear facial masks to go outside. All these factors should be taken into consideration when such discretion is being exercised. 

Furthermore, we have had many enquiries relating to employees returning to work after a period of furlough to be told that some of their furlough period was classed as holiday and as such have had these days deducted from their entitlement. As you can see from above the right under the Regulations requires the minimum notice to be given, and if this has not been given holidays cannot be deducted retrospectively. Furthermore, there is no right to a payment in lieu of holidays and in fact this is expressly prohibited under the Regulations. Only when the employee leaves his/her employ are the entitled to payment for unused holidays. 

Given the pandemic the law on carrying over holidays has changed and employees are now able to carry over unused leave in some circumstances. To afford employers and employees with more flexibility in relation to annual leave requests, the Government has amended the Working Time Regulations 1998.

The amendments effectively allow workers to carry over up to four weeks' annual leave into the next two holiday years, “where it has not been reasonably practicable for them to take it as a result of the effects of coronavirus”.

On that basis we take the view that the entitlement to carry over holidays under the amended Regulations would cover situations where an employer has refused to allow an employee to take annual leave during the pandemic due to an increased workload or lack of cover for example.

However, if an employee chooses not to take leave because they are unable to go on holiday due to travel restrictions or they did not want to take their holidays for unrelated reasons, these are arguably not situations covered by the amendment, as it may be said it was practicable to take holidays but the employee has taken the decision not to do so - if this is the case an employer would be best advised to inform their employee and make arrangements so that holidays can be taken in line with their duties under the Regulations to encourage staff to take such leave.

The Government has published guidance on Holiday entitlement and pay during coronavirus (COVID-19), which includes guidance on factors to consider when deciding what is reasonably practicable.

We acknowledged that this is an extremely worrying and stressful time for all our readers, and we hope the above assists you. However, If you require any specific or additional legal advice which has not covered in this article above, please get in touch using the contact us form.