Employers: are you ready for 2021?

What holiday entitlements are workers entitled to?

As a statutory minimum, almost all full-time workers are entitled to 5.6 weeks’ paid holiday per year. Employers may offer additional holiday entitlements and it is therefore important to refer to your worker’s employment contract to calculate their entitlements.

How does furlough affect this?

Workers who have been placed on furlough will continue to accrue statutory holiday entitlements.

Can I require workers to take holiday or cancel a worker’s holiday?

You can require workers to take holiday, however you must serve a notice period of double the length of the holiday period that you wish for your worker to take. So, for example, if you require a worker to take two days’ annual leave; four days’ notice should be provided.

You can also cancel a worker’s holiday if you provide the required notice period of the length of the planned holiday or if you require the worker not to take holiday on a particular day.

If you require a worker to take or cancel holiday with less notice, you will need the worker’s agreement to do so. The notice periods are in advance of the first day of the month, so if you need to cancel a worker’s 5-day holiday, you would need to give notice earlier than 5 days before the planned holiday.

There continues to be an ongoing debate surrounding whether an employer can require a worker to take leave while on furlough. According to the ACAS guidance, employers should seek to encourage workers to take holiday prior to requiring that leave be taken. If an employer requests for furloughed workers to take leave, it is important to comply with the above notice periods.

How much do I need to pay furloughed workers who are taking annual leave?

The guidance stipulates that pay received by a worker while they are on annual leave should reflect what they would have earned if they had been at work. If a worker is receiving 80% of pay on furlough via government grants, this would need to be topped up by the employer to reflect 100% of their usual holiday pay.

If there is not enough time for workers to take their annual leave or an employer is unable to financially ‘top up’ the holiday, what options are available?

Generally, 4 of the 5.6 statutory holiday weeks are not permitted to be carried over into the following holiday year. Workers are now able to carry over their annual leave into the next two future holiday years where it has not been reasonably practical for the worker to take some, or all, of their outstanding holiday. The guidance also states that employers should do everything that they can to encourage leave to be taken in the current year. If an employer is unable to top up a worker’s holiday pay to 100% as a result of the financial impact caused by the coronavirus outbreak, it is likely that in these cases, it will be considered reasonably practical to carry additional holiday over into future holiday years.

What is the position on bank holidays?

If a bank holiday would normally have been taken as part of a worker’s annual leave, the employer may use the bank holiday as a day of annual leave or it may defer the bank holiday and permit the worker to take the day off at another time.

Why is this guidance important for employers?

As highlighted, workers on furlough are now able to carry over a greater amount of their annual leave into future holiday years. By not encouraging workers to utilise their annual leave or not requiring workers to use some of their annual leave, workers may be left with large amounts of annual leave to utilise at the same time as other workers, which may affect business operations. Or in the event of a redundancy, you may find that larger payments in lieu of annual leave are owed to workers. It is therefore important to review the holiday position of your workers to prevent these issues arising.

Advice

If you need assistance or advice on the contents of this article, please contact Thackray Williams LLP who have set up a FREE Legal Advice Line to businesses and employees in the wake of COVID-19. Do get in touch on 020 8663 4127 if you wish to discuss this matter in more detail or require any further advice.