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Annual Leave whilst Furloughed


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A question came in to us via Tapestry and we asked if they would like us to post it here to get the views of others.

They have a member of staff who has been furloughed, but has managed to book a flight to visit family overseas. They will be out of the country and unavailable for work for some of their contracted work days, although they would not been asking them to come to work during this period. Are they right in thinking that the member of staff needs to use their annual leave for this trip? They would be paid 80% through the furlough scheme and the rest topped up by the business. The member of staff seems to think they do not need to use their annual leave. 


I was able to find this information from ACAS, but we thought we would ask here too in case others had had similar experiences. 

Obviously, things have also changed now as people flying back in need to isolate for 14 days...

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This is a section from a letter from our employment solicitor: 

The Government has amended reg.13 of the Working Time Regulations 1998 (SI 1998/1833) to allow workers to carry over up to four weeks' annual leave into the next two holiday years, where it has not been reasonably practicable for them to take it as a result of the effects of coronavirus.

This law applies for any holiday the employee or worker does not take because of coronavirus, for example if they are either:

·             self-isolating or too sick to take holiday before the end of their leave year.

·             had to continue working and could not take paid holiday.

·            been 'furloughed' and cannot reasonably use it in their holiday year.

  1. Under normal circumstances, the contract of employment does not provide for the Organisation to ‘fix’ holidays and therefore, unfortunately there is no contractual right to do so now. However, I have known some employers press ahead regardless and insist that employees take holidays.
  2. Guidance published by HM Revenue and Customs on 17 April 2020 on calculating wage costs or claims under the Coronavirus Job Retention Scheme confirms that employees can take annual leave while furloughed.

The Organisation must pay furloughed employees their normal rate of pay for a period of holiday, rather than any reduced amount they receive during the furlough. In particular, bank holidays are fixed, do not form part of the rollover referred to above, and are payable at the 100% usual rate of pay, as opposed to the furlough rate. 

  1. It is not clear if an employer can require an employee to take annual leave during a period of furlough, by giving them notice to do so, notice usually being double the duration of the holiday, or as much notice as the employee is required to give to the employer for the same period of holiday, whichever is the greater – (although the likely need to pay employees their normal weekly pay during a period of annual leave may mean this is an unattractive option for many employers in any event).

            Until the position is clarified by government guidance, if the Organisation requires employees to use up their annual leave while they are furloughed, it risks a claim that they are in breach of the Working Time Regulations 1998.

            While case law has found that employees can be required to take annual leave at a time when they would not otherwise be working (Russell and others v Transocean International   Resources Ltd and others [2012] IRLR 149 SC), it is not clear if the same principles would apply during furlough leave. Therefore, the safest option for employers is not to require employees to use their annual leave during the furlough.

If an employer does wish employees to use their holiday while furloughed, it should seek their agreement to this, rather than imposing a period of annual leave on them. Employees in receipt of reduced pay may be happy to take annual leave while they are furloughed if this would be on full pay.

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