Taking Annual Leave During the Festive Period and Flexi Furlough Scheme

The extended job retention scheme – which will be in place until 30 April 2021. Employees can now be on full or flexi-furlough and the Government contribute of 80% of salaries for hours not worked (capped at ￡2,500 per month), with national insurance and pension costs paid by employers. 

The guidance makes it clear that employees continue to accrue annual leave in the normal way and that they can take holiday whilst on Furlough Leave without interrupting that Furlough Leave period. Annual Leave must be paid at the employees’ pre-furlough salary so will incur some cost to the employer, which cannot be claimed for. 

Nevertheless, the Flexi Furlough Scheme contribution could seem attractive to employers that might be slowing or shutting down over the festive period, making it tempting to place some or all of their employees on flexible Furlough Leave for this period so that they can recover 80% of the annual leave costs. It is very clear from the Government  guidance that it is not permitted to place workers on Flexi Furlough Leave if they are only being put on Flexi Furlough Leave to take annual leave, or if the business usually does less business over the festive period (i.e, the slowdown or shutdown of the business is not related to the Coronavirus pandemic). 

Unfortunately, the guidance does not address the situation where the slowdown is worse for businesses this year, or where a business is not in a position to weather a seasonal slowdown as a result of the cumulative effects of the pandemic on their business. In these circumstance, it would be up to employers to consider whether they can legitimately Flexi Furlough their employees. 

If the employee is genuinely already on Flexi Furlough Leave and the employer would like him/her to take holiday during the festive period; for example, to minimise excessive accrual that could cause disruption if and when business picks up, it is possible for the employer to insist on holiday being taken at this time. 

These caveats apply.

• If there is a provision in the terms and conditions of employment to allow employers to tell their employees when to take holiday, including during a slowdown or shutdown. If so, then they can exercise this right in accordance with the terms and conditions of employment;
• If there is no such provision, the employer may direct their employee when to take holiday if they give them double the amount of notice as the amount of holiday that they would like the worker to take (though this timeframe can be varied if the worker agrees);

Regardless, the Coronavirus context means that some employees may argue that because they cannot really go anywhere or see anyone outside their bubble, they will not enjoy genuine leisure time, which breaches the spirit of the legislation. The strength of these arguments will depend on the employees situation at the time. This will include whether they have Coronavirus or are self-isolating; holiday can legitimately be postponed during periods of actual sickness but not necessarily during periods of self-isolation. 

Employers should consider their employees specific circumstances, so they can confidently insist on the holiday being taken or decide, for example, to build up some goodwill by gifting additional days to employees who are likely to be stressed and anxious – and who may well return to work more motivated and engaged as a result. 

From a welfare perspective, whether employees actively working or not, employers should ensure employees are taking at least their basic minimum holiday entitlement of 20 days per holiday year. Managers should actively encourage the opportunity to switch off to avoid burnout or other physical or mental health conditions.