Furlough is not just for the Christmas holidays

Can you put employees on furlough just for Christmas closedown or holiday?

The coronavirus job retention scheme (CJRS) has been extended from 1^st November to 31^st March 2020. The extension of the furlough scheme is slightly different to the first time around in that:

1. Any employee/employer can use and they do not previously have had to have used the CJRS;
2. Employees must have been on RTI as of 30^th October 2020;
3. The furlough grant is 80% (or capped at £2,500) for hours not worked;
4. Employees can be on full or flexi-furlough;
5. No work during period of furlough.

It is still possible to have employees on either notice or holiday while claiming the furlough grant. The employer must top up to full pay if the employee is on notice or holiday.

In relation to holiday, lots of employers shut down for Christmas and employees take holiday. Employers are likely to question whether employees can be placed on furlough for this closedown. The answer is:

1. Yes if they are already on a period of furlough;
   or
2. No if the period of furlough is just to cover
   holiday.

Can you force employees to take holiday while on furlough?

It is possible for employers to force employees to take holiday, employers will need to:

1. Check their contract to see if it allows employers to force holiday during planned closures. If not, we suggest employers may want to review contracts. We offer a free review service;
2. Legislation allows if the employer gives the employee double the notice of the holiday they require the employee to take.

We advise making decisions over how to deal with holiday in light of covid-19 and furlough. You may need to take advice, as employees may be able to argue that they are not able to take valid holiday during lockdown or as a result of Covid.

Extract from government guidance below:

Holiday Pay

Furloughed employees continue to accrue leave as per their
employment contract.

The employer and employee can agree to vary holiday entitlement as part of the furlough agreement, however almost all workers are entitled to 5.6 weeks of statutory paid annual leave each year which they cannot go below.

Employees can take holiday whilst on furlough. If an employee is flexibly furloughed then any hours taken as holiday during the claim period should be counted as furloughed hours rather than working hours.

Employees should not be placed on furlough for a period simply because they are on holiday for that period. Working Time Regulations (WTR) require holiday pay to be paid at the employee’s normal rate of pay or, where the rate of pay varies, calculated on the basis of the average pay received by the employee in the last 52 working weeks (twelve weeks in Northern Ireland). Therefore, if a furloughed employee takes holiday, the employer should pay their usual holiday pay in accordance with the Working Time Regulations.

Employers will be obliged to pay employees who are on holiday additional amounts over the grant, though will have the flexibility to restrict when leave can be taken if there is a business need and the correct notice is given. This applies for both the furlough period and the recovery period.

If an employee usually works bank holidays then the employer can agree that this is included in the grant payment. If the employee usually takes the bank holiday as leave then the employer would either have to top up their usual holiday pay, or give the employee a day of holiday in lieu.

For more information on holiday pay during furlough, click here.

Government guidance can be found here.