Holiday rights remain in place even if a member of staff has been furloughed. In this article, we look at how holiday entitlement and pay apply with regard to furloughed employees.

Statutory holiday entitlement
Workers (a broader category than ‘employees’) are entitled to at least 5.6 weeks’ paid holiday per year regardless if they are on sick, maternity or parental leave etc. However holidays cannot be taken while on some form of statutory leave.

Furloughed workers and holiday entitlement
Workers continue to accrue holidays while they are on furlough too, but unlike when on sick leave, they can take holiday at the same time as being on furlough. Provision should be made for furloughed staff to be able to apply for and book holiday in the usual way. Employers can require staff to take holidays by giving sufficient notice of that requirement; a sensible precaution to take to avoid long-furloughed staff returning to work with a full holiday entitlement to take before the end of your holiday year. 

Holiday pay vs. Furlough pay
Calculating holiday pay can be tricky for staff whose pay varies according to their hours or output. Putting those issues to one side, any furloughed employee who takes holiday during their furlough, should receive 100% of their correct holiday pay; any agreement with a member of staff to receive less ‘furlough pay’ refers to their pay while on furlough, as opposed to what they are paid when on holiday.

Rolling over holidays
The usual rule of ‘use it, or lose it’ has been eroded over time recently with the courts confirming that if an employee is unable to take holiday in the holiday year, for example by reason of maternity or sick leave however the ‘carry over’ is only into the next holiday year.  On 27 March this year, to mitigate against the impact of the Coronavirus, the government announced that workers who have not taken all of their statutory annual leave entitlement due to COVID-19 will be able to carry it over into the next two holiday years.

The employment team at TSP works closely with the corporate and commercial teams and delivers sensible advice designed to help your business do what is necessary.  If you have any concerns about managing your staff at this difficult time, please do not hesitate contact Jolyon Berry at or 07771 542740. Jolyon leads the TSP Employment Law team and is a Legal 500 “Leading Individual”.