COVID - Holiday During Furlough

How holidays should be managed for employees who are on furlough has remained a subject of confusion pretty much since the outset of the Coronavirus Job Retention Scheme. Without publishing clear guidance, the Government added to the uncertainty by proposing new legislation that enables employees to carry over unused holiday for the next two years.

We have always been confident that this move was specifically to make sure that those who had been unable to take their holiday during the Covid-19 pandemic would not lose it. Specifically, in essential occupations like Doctors, nurses and other key workers whose continued attendance at work has enabled the rest of us to still receive the vital goods and services we need. It was never intended for furloughed workers.

One of the early worries for some employers was that furloughed workers would return to work at some stage and promptly all request holiday at the same time meaning no-one would be at work and the company would not be generating money to pay holiday pay.

We’re pleased to say this needn’t be the case.

Holiday entitlement remains a statutory right so it is not a subject that we should take lightly. However there are rules and regulations already in place that mean we can take an approach to managing the holiday entitlement of furloughed workers that is fair and equitable.

Here are some key principles:

  • Employers can, with adequate notice, instruct employees when to take holiday leave
  • Employees can be on holiday simultaneously to being furloughed
  • Holiday continues to be accrued during furlough
  • Holiday should provide a time of rest and recuperation away from work

So, if your employees are furloughed, you are able to tell them to take their holiday during this time. You need to give notice that equates to twice the length of the holiday period; so for a week’s holiday you need to give two weeks’ notice, but that should be easy to achieve in the current circumstances. If you used our furloughed workers designation letter, there is a clause that covers this point.

As furloughed workers are not allowed to undertake work for their employer then it’s fair to say that they can use the time to enjoy rest and relaxation, even if they choose to decorate the house.

A key point however is that any holiday taken must be paid at 100% of the employee’s normal rate of pay rather than the 80% furlough rate. We know many employers are topping up pay anyway, but for those who are not, this is likely to play a significant part when any day of reckoning comes. You will struggle to argue that you enforced holiday to be taken if you haven’t paid for those days at the employee’s full rate of pay.

Note that this rule applies to Bank Holidays too. We are about to enjoy our fourth bank holiday since the CJRS was implemented, so that’s four days you should be paying furloughed workers at their full rate of pay. Failure to do so may result in workers expecting to have maintained those days as holiday.

This covers the main points but we know there are sure to be more specific and nuanced questions that many of you have regarding holiday during furlough. For that we’re available as usual on 01452 331331 or by e-mail at This email address is being protected from spambots. You need JavaScript enabled to view it.