We’re all going on a summer holiday – avoiding the Cliff of unwelcome accrual (UK)
New Coronavirus measures seem to arrive every day, but some old-fashioned issues still rock along underneath them, including just what happens when travel restrictions and the closure of everything fun put an immediate brake on your employees’ holiday plans.
The obvious answer is that they defer the break until the world restarts, but by that time a substantial number of your staff will have the thick end of a full year’s holidays to take in what might be only three or four months, so your available staff numbers go off the proverbial just at the time when you are most likely to need them all back on deck to meet the pent-up demand for your services or products shelved during lockdown.
Options for employers
Use your contractual right to refuse holidays at times which are inconvenient to the business – this is legally OK but will simply defer the problem into the following year or (if that contravenes your own rules about holiday carry-over and you are not prepared to relax these) create a demand to be paid in lieu which under the Working Time Regulations you should really not agree to other than on termination. Remember that at the end of all this, your employees will have a need for one of Cliff’s actual shining sun, blue sky, fun and laughter holidays which is far more primal and fundamental than in any prior year. Even if you do offer cash in lieu, therefore, the take-up may be very limited. If prohibiting later holiday is likely to be one of your control measures nonetheless, much better to tell employees now that they should not assume that it will be possible for them to take all the holiday they might want later in the year, and that more than ever it is important that they clear proposed absences with you before heading to the travel agent.
Use the provisions of the Working Time Regulations to compel people to take at least their statutory minimum holiday entitlement during the current quiet/lockdown/furlough period. This requires you to give the employee in question prior written notice of at least double the length of the holiday you want him to take. Again, this is legally valid but from an employment relations perspective, remember that by doing it now you will in effect be compelling your employee to spend a material part of his annual holiday entitlement alone on his own sofa. This will feel like an injustice to be nursed long after the crisis ends.
Where people are on furlough, make it clear that if they take accrued holiday, it will be paid at full rate. This will make it more lucrative than their remaining unpaid or on the government’s capped furlough scheme. This is incidentally a reason why an employer might choose not to top up furlough pay, at least fully – if I get the same money from being furloughed as being on holiday, why would I agree to eat up my own holiday entitlement? You can decide whether you would limit this to holiday accrued to date or allow some taking of leave in advance of its accrual. The latter does create some risk of exposure for the business if the employee then leaves in circumstances where you can’t recoup the overtaken amount but that is a commercial judgment to be weighed against the benefit of less pressure for time off later in the year.
Which can lead to the question of whether holiday accrues in furlough at all. Legal opinion on this is very mixed. It is our view that statutory holiday will not accrue over that period because the underlying driver for the Working Time Directive entitlement (i.e. that holidays are a rest from work and so a necessary health and safety measure) is not engaged where the employee is not supposed to be working anyway. Accepting that logic is not high up on a list of the WTR’s attributes, to claim a health and safety need for a break from not working seems something of a stretch. By contrast, maternity absence is a specifically protected period and sickness or sabbatical absence (during which holiday would accrue), is something personal to the employee and not a statement by the employer that there is no work for him to do.
If you are imposing short-time working for a period rather than full furlough, consider offering staff the option to mitigate its financial impacts by, say, two days working, two days unpaid and one day’s paid holiday in each five day week. If that can be agreed, fab, but if it is not then you are back to not being able to force the taking of holiday other than where provided for under contract (as sometimes appears in respect of the notice period) or through the formal mechanism in the WTR.