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Furlough and Annual Leave

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Furlough and Annual Leave

Can an employee take annual leave whilst furloughed?

Yes, they can.

How would employees be paid?

Whilst furloughed employees are only entitled to basic salary, however remuneration for annual leave must be normal remuneration which includes bonuses, commission etc, so employers should make sure that employees are being paid what they usually would be for annual leave. However, there is no reason that an employer cannot recover 80% of the basic salary from HMRC if the employee is on annual leave and furloughed.

Can we require employees to take annual leave?

Yes. In order for an employer to require their employee to take a period of annual leave, they must have twice as much notice. If you want an employee to take one week’s annual leave, you will therefore provide them with two weeks’ notice.

Would a period of annual leave count towards the three weeks requirement?

As we know, any period of furlough must be at least three weeks, and if you require an employee to take annual leave whilst furloughed, this will count towards the three weeks. For example, an employer could furlough an employee and at the same time give two weeks’ notice of one week’s annual leave, taking the total duration of that period to three weeks.  

 What if we do not want an employee to use their annual leave whilst furloughed?

This is not a problem; many employers may want to benefit from the Job Retention Scheme as much as possible and not top up an employee’s salary. If an employee has been prevented from using their annual leave as a result of coronavirus, they are entitled to carry over a maximum of four weeks for two holiday years.

What if an employee already has a period of annual leave booked?

They can still take this whilst furloughed if you are agreeable to this. If they request to cancel this in order to take it at another time, it is entirely up to you as to whether you can accommodate this request.

The team at FTA Law provides advice to clients across the commercial and healthcare sectors with many of our instructions coming from referrals from long standing clients and industry contacts.

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