Elliot Hawker
May 4, 20203 min
Last week, the
government provided much wanted clarity with regards to annual leave and
redundancies with furloughed employees. But why is this update more important
than all other times that clarity has been provided by the government? Why should this grab your attention?
Well, this time,
commercially sensitive employers, those with cash flow issues, those that might
be facing workforce planning issues when they return post lockdown have a real
opportunity to head off some prominent issues, whilst subsidised by the
government scheme – but you will have to act fast to make this work for your
business, given that the scheme is due to expire on 30th June 2020.
Firstly, we are
going to walk you through the basics, before guiding you through what to do
next.
Do holidays accrue
throughout a furlough period?
It is clear that
employees continue to accrue annual leave throughout a period furlough.
Currently, there is no relaxation of the Working Time Regulations that prevents
the accrual of annual leave throughout furlough.
Can employees book
and take holidays throughout a furlough period?
Originally, this
was a point of confusion as to whether if annual leave would be seen as an
interruption to the minimum 3 week period of furlough.
It has recently
been clarified that annual leave can be taken throughout the furlough period
and will not effect the furlough period.
Any annual leave
periods will need to be paid at the employees normal rate of pay although, the
government have confirmed that you can use the furlough grant and top up to the
employees normal rate of pay.
Can we enforce
annual leave throughout a furlough period, or once the furlough has finished?
The default position under the Working Time Directive is that you need to issue
notice which is twice the amount of time that you would like the employee to
take. Therefore, if you are requiring the employee to take 5 days leave,
you will be required to give 10 days notice. Unless the Contract of
Employment or Employee Handbook provides differing notice provisions.
Therefore, any
employer that thinks that they may have labour planning issues in relation to
employees booking annual leave throughout the second half of the year should be
acting now to issue notice of enforced annual leave. Thereby subsidising your annual leave payment
with the government furlough scheme.
Can annual leave be
carried over to future annual leave years?
Once the furlough ends, employers may find themselves potentially with a
workforce that hasn’t taken much of their annual leave which could leave them
with a staffing challenge for the remainder of the year. So, what
provisions have been made here to assist employers?
For those that are workers in key industries, the Government have allowed for 4
weeks to be carried over the following 2 annual leave years.
There has been no
actual provision to allow carry over for other employees outside of those
categories at this point, although it is expected. Therefore, currently
we should be working to ensure that all employees take their minimum allowance
(currently 5.6 weeks inclusive of bank holidays) within the leave year.
If I need to make
more permanent staffing cuts, can I look at redundancies?
This was a point of much confusion until last week, how do you consult with
someone who is furloughed, under a scheme that is designed to protect employee
jobs?
The official
position of the government is, yes, an employer can still make an employee
redundant whilst they are furloughed or afterwards, subject to existing
redundancy legislation.
The government have
also clarified that whilst furloughed employees may still undertake union or
non-union duties and activities, such as representation of employees or other
workers. (Although in doing this they must not provide services to or
generate revenue for or on behalf the organisation).
If you are thinking
that you will need to make permanent staffing cuts in order to safeguard your
business longer term, you can indeed start consultation and issue notice
throughout the furlough period, therefore, we encourage you to start now.
As an employers, I
am confused as to what I should be doing next so I do not end up with problems
post lockdown?
Understandably,
your staffing model may need to change throughout the lifting of restrictions
as we move into the recovery phase. If you wish to understand how best to
approach your revised vision, please do call us at NucleusHR on 07960 418494.
Again, if you are not looking at making staffing changes, but you do not want to get caught with employees wishing to take their entire entitlement to annual leave in perhaps only half the normal leave year, please do contact NucleusHR by emailing toni@nucleushr.com.