Holidays during lockdown – what are your rights?

We are all thinking of holidays now that the weather has warmed up. But how has furlough, and the lockdown, affected workers’ rights to annual leave?

Catherine Urquhart explains the new rules for lockdown leave

Introduction – our existing rights to annual leave

As a reminder, employees and workers have the right to 5.6 weeks (that is, 28 days) of paid annual leave each year. These rights extend to those on fixed-term or zero-hours contracts – only the truly self-employed are not covered. (There are a handful of other exceptions, such as sea-fishermen, merchant sailors and service personnel, who have different rights, which are not covered here.) For part-timers, the amount is worked out on a pro-rata basis. The ‘leave year’ might be the same as the calendar year, or it might cover a different 12-month period, such as September to August.

The statutory right to annual leave is set out in the Working Time Regulations 1998 (“WTR”), which were originally derived from the European Working Time Directive. Four weeks’ leave is provided for under reg 13, derived from EU law, and a further 1.6 weeks is provided for under reg 13A, derived from UK law. Some contracts of employment offer more generous allowances than that, but the legal minimum is 28 days.

The principle of paid annual leave is a fundamental social right in EU law. The purpose of it is to ensure that workers have a rest from work, and a chance to enjoy rest and leisure. That’s why, normally, annual leave cannot be ‘carried over’ to the next year. The idea is that everyone should take their holiday each year, in order to rest and relax, rather than to work continuously without a break.

The lockdown has however brought changes. New laws have been hastily introduced, affecting holiday rights. The Coronavirus Job Retention Scheme (“CJRS”), which sets out the rules regarding furlough, has already been modified several times. So what is the latest position?

  1. I have been furloughed. Can I choose to take annual leave during furlough?

Yes! If you have been furloughed, you are still entitled to take annual leave in the usual way. Under regs 15(1) and 15(4)(a) of the WTR, you must give your employer notice of your planned holiday that is twice as long as the holiday itself. For example, if you want to take a week of leave, you must give at least two weeks’ notice.

Of course, if you are already furloughed, you are not allowed to work for your employer, so being on annual leave might not feel very different to being furloughed. And, given the lockdown restrictions, you might not be able to take the holiday you were planning to take. This leads to the next question…

  1. Months ago, I had booked some annual leave, but due to the pandemic the holiday company has cancelled my trip. Can I insist on working as usual instead of taking that time off, and save my annual leave to take at a later date?

This will be a matter for negotiation between the worker and their employer. Most businesses will want staff to take breaks that are spread throughout the year, so they are not faced with a backlog of annual leave being taken all at once when lockdown ends. Ideally the parties will be able to come to an arrangement that suits them both. But ultimately the employer can insist on the person taking leave if they have already booked that time off.

My boss wants to make me take some of my annual leave during furlough – are they allowed to do that?

In theory, yes. But in practice, this is a matter for negotiation, given that many people will say that having annual leave during the lockdown isn’t much fun and won’t enable them to rest and relax.

Of course, the concept of an employer setting rules about when staff can take holidays is nothing new. For example, teachers cannot take annual leave during term time; professional footballers cannot go on holiday mid-season. Workers should check their contract for any rules applicable to their job.

Under reg 15(2) of the WTR, an employer can oblige a worker to take annual leave, or indeed not to take it, on certain dates, by giving the requisite notice. This still applies, whether the worker is on furlough or not.

If the employer wants to order the worker to take a period of annual leave, it must give the worker notice that is double the length of the holiday they are ordering the person to take (reg 15(4)(a)). For example, if the employer wants to order the worker to take one week’s holiday, they must be given at least two weeks’ notice. (Individual contracts may set out different notice periods.) Furlough has to last for at least three weeks. So an employer can put someone on furlough, and on day one of furlough, direct that they take the third week of furlough as annual leave.

There’s an exception if the worker is on a period of sickness absence. If so (although the worker can still ask to take annual leave), their employer cannot force them to take annual leave. That derives from the principle that annual leave is there for the purpose of rest and relaxation and if someone is off sick, they won’t be able to enjoy their holiday.

Ultimately, the Employment Tribunals may be faced with cases where the employer ordered the worker to take leave, but the worker argued that they could not do that, because the lockdown meant they could not rest and relax properly. If they are self-isolating or caring for a vulnerable relative, for example, they are likely to have a good argument to say that they could not enjoy annual leave in those circumstances. Until such a case is decided, employers are best advised to tread carefully and consult staff and representatives before ordering anyone to take annual leave during furlough.

  1. We are now surprisingly busy at work, and my boss wants me to cancel the holiday that I had already booked – can they do that?

In theory yes, although that may seem unfair. The employer must give the correct notice, however. Under reg 15(4)(b) of the WTR, the employer must give the worker the same length of notice that they cannot take holiday, as the holiday was. In other words, if the person had booked a two-week holiday, the employer must give them at least two weeks’ notice that they cannot take it (unless the contract provides otherwise).

Of course, if someone has paid for a holiday in advance, being forced to cancel it at short notice would be pretty controversial. If they cannot recover the cost, they might even have an argument that the employer’s actions have breached the term of trust and confidence, even entitling the worker to resign and claim constructive dismissal. That’s a ‘nuclear option’ at any time, especially during the unusual conditions of lockdown, so it’s more likely that any employer wanting to change a worker’s pre-booked holiday will tread carefully and negotiate with them to avoid difficulties.

Employers must bear in mind that workers have a legal right to annual leave and denying that right, without very good reason, may be unlawful. Employers must also check that their actions cannot be seen as discriminatory in terms of whom they select when asking staff to cancel pre-booked leave.

  1. What happens to my holiday rights if there is a bank holiday during furlough?

There is no automatic right to have a day off on a bank holiday – it will depend on what is in the contract. If an employer obliges staff to work on a bank holiday it must ensure that they still get their full 28 days’ annual leave during the year.

If a worker is furloughed during a bank holiday, and they would normally have worked on that bank holiday, then the situation is simple: they are on furlough so they do not work that bank holiday. But if they are on furlough during a bank holiday and they would normally have had that bank holiday as a day off, there are different considerations. The parties can agree either that the worker will get a day off later in the year to compensate, or that they will be paid for the bank holiday at the correct rate of holiday pay – see next question.

  1. If I take annual leave during furlough, what level of pay am I entitled to?

Anyone who is furloughed on the CJRS will be aware that this scheme provides for 80% of their normal pay, up to a total of £2,500 per month. But holiday pay must be paid at 100% of normal pay, not 80%. That is because of the principle that workers must not be disadvantaged by choosing to take holiday. So when staff are taking annual leave during furlough, the employers must pay them what they would normally earn. The employers can recover 80% of that from the government under the CJRS, but must foot the bill for the remaining 20%.

  1. Our business is likely to be so busy once lockdown lifts that we don’t want our staff to take all their annual leave this year. Can they carry it over to the next leave year?

The normal position is that the four weeks of annual leave provided by reg 13 WTR cannot be carried forward, but the 1.6 weeks provided by reg 13A can be carried forward to the next leave year, if that is set out in an agreement between the employer and their staff. (There are some circumstances when the four weeks can be carried over – if the worker is off sick, or on maternity leave. These rules stay the same under furlough.)

Because of the pandemic, the Government has recently changed the law regarding ‘carrying over’ leave. Under the Working Time (Coronavirus) (Amendment) Regulations 2020, which amend reg 13 WTR, workers can carry holiday forward into the next two leave years, if the impact of coronavirus means that it was not “reasonably practicable” to take it in the leave year to which it relates.

What might make it not “reasonably practicable” to take leave this year? The amended reg 13 refers to the “result of the effects of coronavirus (including on the worker, the employer or the wider economy or society)”. This will probably cover things like the company suddenly being very busy when recovering from lockdown, or workers being unwell due to contracting Covid-19. Also, if a company’s leave year ends during lockdown, rather than on December 31, it may also not have been possible for everyone to have taken their leave during that leave year.

However, employers should do their best to get staff to take their leave in the correct year. The point of annual leave is to rest and relax. Working for extended periods without breaks is contrary to that principle. If staff are on furlough, the employer should get them to take annual leave then, to avoid having to carry it over.

As usual, if someone leaves their job or is dismissed and has not taken all the annual leave to which they are entitled at the point of their termination, they will be paid for that in lieu.

Advice and information

  • Employers should ensure that the rules on annual leave are set out clearly in the staff handbook, including the amount of notice that must be given, the procedure for booking leave, and any periods (such as Christmas or the summer) when leave cannot be, or must be, taken
  • Because of all the changes caused by the pandemic, employers should make extra efforts to talk to staff and unions about taking annual leave, as early as possible, and ensure staff are updated via the intranet and in writing
  • There is extensive information on the CJRS on the gov.uk website
  • ACAS has masses of advice: https://www.acas.org.uk/coronavirus
  • Note that the above information is subject to change. The Government states on its website: “During this unprecedented time, we are keeping the policy on holiday pay during furlough under review.”