8th April 2020 / COVID-19 Updates

Coronavirus Job Retention Scheme (CJRS) - Holidays

Holiday

This is something that has recently come to light so I thought it would be useful to do a brief blog on it for you.

This is not our opinion but is taken from the information we have received so we urge employers to seek professional advice from either an employment lawyer or HR specialist regarding this information if it is applicable to you.

Where employees have already booked holidays off in advance of being furloughed or in respect of any employees who will be furloughed during the Easter Bank Holidays or May Bank Holidays, the ability to be able to claim under the Job Retention Scheme (JRS) in full or in part may be affected.

This is something that is exercising the minds of Employment Law Specialists and, as of now, there is no definitive answer. These specialists are suggesting that at present there are three options open to an employer when considering the Easter and May Bank Holidays – and each one has potential repercussions:

  • Ignore the Bank holidays as they fall within the furlough period. In which case, simply pay the employee as per the furlough agreement and make a claim under the CJRS. Employment Law Specialists believe this could bring the employer in breach of both contract and minimum statutory holiday requirements. It could also prevent a claim through the CJRS or result in a recovery of a claim at a later date.
  • Agree to pay the employee the Bank Holiday pay in full. This should meet the employer’s statutory and contractual obligations. However, it could prevent the employer from being able to claim under the CJRS for any element of the holiday pay and, at worse, break the continuity of the furlough period. If that is within the first three weeks of the furlough period could that result in the whole of the perceived furlough being null and void?
  • Agree with the employee that the Bank Holidays/holidays are to be taken at a different time. This sorts out the issues in A) and B) above but the employer will have to deal with the accrued holidays once the employee comes back to work. This is alleviated, to some extent, by the recent Government announcement that it will be possible to carry over up to four weeks holiday to be utilised over the next two business holiday reference periods.

This is certainly an issue which has blown up amongst Employment Law Specialists over the past couple of days. Their further concern is that neither the employee nor the employer may have been aware of the full employment law facts regarding holidays when entering into the furlough agreement in which case if left on a whim, is it legally not worth the paper it is written on?

It’s a decision for each employer to take. Either:

  1. Sit on their hands and hope that an eventual Government edict covers them both from a JRS perspective and from an employment law one as well or…
  2. …take one of the above three options.

We would suggest that the third bullet point is probably the more appropriate but each business owner, quite rightly, may have a different take and may get differing employment law advice.

M.A.D. Accountants are based in West Bridgford, Nottingham, and are specialists in tax and accountancy assistance for businesses and individuals. We're here to make a difference to your business and your life with no-nonsense, jargon-free advice and help.

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