Whilst the looming festive season is likely to be somewhat less festive than usual this year due to Coronavirus restrictions, employers still need to be mindful of the implications of staff holidays during this period, particularly if any employees are furloughed.

Because taking time as leave doesn’t “break furlough”, the usual Christmas break won’t necessarily effect employers’ ability to claim the grant. However we would advise against claiming just for the period that employees are on leave as a way to save costs or subsidise pay on both legal and moral grounds.

You’ll know that across the Christmas and New Year break we have three public or bank holidays for which most businesses close; Christmas Day, Boxing Day and New Year’s Day. A lot of businesses, ourselves included, also close for the three working days in between the public holidays to make a longer break. Staff are either told to hold back holiday to cover these three days or they are gifted as additional time off.

With flexible furlough available until March next year, it is theoretically possible to furlough staff just for this period of holiday, however we think that is unadvisable and potentially fraudulent. The HMRC would likely take a dim view if an investigation revealed that your staff were at work either side of the furloughed period, and historically your organisation takes the Christmas period as holiday. We should also respect and follow the moral standpoint of many of the high street supermarkets who are paying back grants for rate relief during the lockdown period as there trading figures were not affected.

Notwithstanding, there are some other key points that we should remind ourselves of regarding leave taken during furlough as we commence the run-up to Christmas.

We maintain our advice that furloughed workers should be advised that any holiday time accrued during furlough is deemed as being taken during furlough. This will prevent the need for employees to take or carry over any accrued holiday when furlough comes to an end. For this to be effective however, employers must pay the for leave days at the employees’ correct holiday pay rate, ie their normal rate of pay.

If you haven’t already done so, we also recommend that furloughed staff are informed that Christmas holidays will be taken as scheduled; especially if you are amongst the organisations that ask employees to hold leave days back for this period. Also be aware that because there is no statutory right to take bank holidays as leave, failure to confirm it could leave you open to an argument that the leave wasn’t taken and should therefore be carried forward.

Remembering to pay the employees their full rate of pay for any holiday days will strengthen your case but a written communication will put your intentions beyond doubt. When instructing staff to take holiday you need to give notice of twice the length of the leave. For one week’s holiday, two week’s notice is required, so time is running out if you haven’t already done it.

And finally, a special change in the law earlier in the year now allows staff to carry untaken statutory leave over to the following holiday year. This was designed for key workers and businesses who became so busy during the pandemic that taking holiday was practically or financially unviable. However, if you are paying furloughed staff at the 80% level and are financially unable to top-up their pay to their normal rate for holiday days, then this will be deemed as one of those financially unviable events and staff will be entitled to carry their leave forward, meaning you’ll have to pay for holiday at a later stage at 100% anyway.

We recommend that even if it’s a struggle, you pay the holiday top-up now so that at least you’re getting a grant for 80% of it.

If this post has thrown up any questions or if you think some HR advice would be a good idea, call us on 01452 331331 or e-mail This email address is being protected from spambots. You need JavaScript enabled to view it.