Coronavirus: how has holiday entitlement been affected?

PayFit
Last updated on 12.05.2020

The coronavirus pandemic has forced many people to cancel or delay their holidays. So, with an overabundance of annual leave to use, what are the employer and employee rights?

We answer in all in this article.

In the UK, full-time workers are entitled to 5.6 weeks (28 days) of paid holiday per year. In any given year, 28 days may seem to fly by; however, the majority of 2020 and 2021 have hardly been normal.

Furloughed workers and holiday entitlement

Employees who have been furloughed under the Coronavirus Job Retention Scheme can request and take their holiday in the usual way, provided it's all agreed with their employer. However, any holiday that furloughed workers take must be paid in full. Employers can still continue to claim furlough payments; however, they are required to top up the outstanding amount to reach the employee's regular salary demands.

Coronavirus and carrying over annual leave

One of the outcomes of the coronavirus crisis may be that staff are unable to take all their holiday entitlement during the calendar year.

To combat this problem, a temporary new law has been introduced that will allow employees to carry up to four weeks' paid holiday (in line with the Working Time Directive) into the 2021 and 2022 holiday years.

The law will apply for any holiday that the employee does not take because of issues related to coronavirus, including:

  • missing out on holiday due to self-isolation or being too sick to take leave before the end of the year;

  • if an employee continues to work and is unable to take paid holiday;

  • if an employee has been furloughed and has not had the time to take holiday within the allocated time.

This carry forward legislation change does not apply to the full 5.6 weeks’ statutory entitlement. Instead, it applies only to the first four weeks of statutory entitlement; however, employers can choose to allow carry forward of the additional 1.6 weeks if they wish to.

Paying out holiday pay

In the event that an employee leaves their role or is dismissed and has carried over holiday entitlement as a result of coronavirus, then any untaken paid holiday must be added to their final pay.

This, according to HMRC guidance, is the only time that employees should be paid in lieu for unused annual leave.

Coronavirus and bank holidays

Employers are entitled to tell employees, regardless of whether they have been furloughed or not, to take paid holiday on a bank holiday.

This is the case every year, which is why, typically, bank holidays make up part of the legal 5.6 weeks' paid holiday for full-time employees.

Any employees who have been furloughed and who are required to take a bank holiday will be paid 100% for that particular day.

In the event that bank holidays are unable to be taken because of coronavirus, employees are able to include these days within the four weeks' paid holiday that can be carried over.

Agreeing on carrying over holiday

If employers do not have an agreement already in place, they can choose whether they will allow additional holiday (holiday above the four weeks' paid holiday) to be carried over. This could include:

  • the outstanding 1.6 weeks' statutory annual leave;

  • holiday that is above the legal minimum.

Employees who are unsure about their entitlement should check their employment contract and speak to their employer.

Should an agreement be reached, both parties should have access to it in writing.

For employers who remain unsure as to whether they should allow extra holiday to be carried over, it is recommended that they receive legal advice prior to making a decision.

Holiday booked before coronavirus

One of the unfortunate outcomes of coronavirus is likely to be the number of holiday plans affected by lockdown and border closures.

As a result, employees who booked holiday before the outbreak may no longer wish to take that time off. However, an employer can still insist that they do so.

If the employee wants to amend the dates of their holiday, they will need to get their employer's agreement.

Requiring staff to take or cancel holiday

Employers have the right to tell their employees when to take their holiday.

For example, during coronavirus, employers are entitled to shut their premises or place of work for a period of time and tell all affected employees to take holiday.

However, to do this, the employer must provide staff with a minimum of twice as many days' notice as the amount they require employees to take off. So, if an employer chooses to close for five days, employees would need to receive a minimum of 10 days' notice.

Employers do also have the right to cancel a pre-booked paid holiday. Should they choose to do this, they must provide the affected employee(s) with the same number of days' notice as the holiday requested.

For example, if an employee was scheduled to be off for 10 days, then the employer must provide 10 days' notice.

PayFit disclaimer

The information contained in this document is purely informative. It is not a substitute for legal advice from a legal professional.

PayFit does not guarantee the accuracy or completeness of this information and therefore cannot be held liable for any damages arising from your reading or use of this information. Remember to check the date of the last update.

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