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CJRS Update 1 December 2020: Holiday Pay

Holiday pay over the festive period

You will be aware that furloughed employees continue to accrue leave as per their employment contract.

However, please note that businesses can only place employees on furlough in circumstances where coronavirus (COVID-19) is affecting your operations. Accordingly, you are not permitted to place employees on furlough just because:

• They are about to commence a period of annual or other period of paid leave; and/or
• Your business is ordinarily subject to a reduction in work over the festive period.

Varied Holiday Entitlement

While it is possible to agree a variation to holiday entitlement under a negotiated furlough agreement, please note that you cannot agree an entitlement that falls below the statutory minimum of 5.6 weeks' annual leave.

As per previous guidance, employees can take annual leave whilst on furlough leave. If they are flexibly furloughed, then any hours taken as holiday during the claim period should be counted as furloughed hours rather than working hours.

Working Time Regulations (WTR) require holiday pay to be paid at the employee's normal rate of pay or, where the rate of pay varies, should be calculated on the basis of the average pay received by the employee in the last 52 working weeks (twelve weeks in Northern Ireland). Therefore, notwithstanding the furloughed status of an employee, where annual leave is taken, this should be paid at the "full" rate in accordance with the WTR.

Employers will be obliged to meet the difference between the full entitlement and the CJRS payment, although employers - in accordance with their ordinary entitlements under the WTR - have the flexibility to restrict when leave can be taken and can give notice for leave to be taken on particular dates, provided sufficient notice is given.

For more information contact Emma Swan in our Employment & HR department via email or phone on 01254 222354. Alternatively send any question through to Forbes Solicitors via our online Contact Form.

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