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We’re all going on a summer holiday – or are we? HR’s new holiday dilemmas and how to solve them

Everybody’s still on furlough – what happens with the annual shutdown? Is it holiday or furlough?

It can be both. Holiday can be taken at the same time as you are claiming a grant for employees under the Coronavirus Job Retention Scheme or ‘furlough scheme’. The shutdown won’t interrupt your claim (but remember that you will have to top up furlough pay to the same level as employees’ normal rate of holiday pay during the shutdown).

Can we put everybody who is currently working back on furlough during the annual shutdown (to help with holiday pay)?

You risk getting into trouble for abuse of the furlough scheme. Government guidance makes it clear that, while furlough and holiday can overlap, employees should NOT be placed on furlough simply because they are going to be on holiday during that time. The message seems to be that you can’t use the furlough grant just to subsidise holiday. This is different from the situation above where everybody was fully furloughed – before and during the shutdown – due to a lack of work caused by Covid-19 (not ‘simply’ to cover the shutdown).

We can’t afford to top up furlough pay to normal holiday pay.

You may need to require employees not to take holiday while they are on furlough if you can’t afford the top-up to normal holiday pay. Government guidance recognises an employer’s right to restrict when holiday can be taken under the Working Time Regulations (WTR). Special regulations have also been introduced which permit employees to carry over up to four weeks’ paid holiday into the next two holiday years if it cannot be taken due to Covid-19. If you take this route, be careful with staff communications and make sure you satisfy the correct WTR requirements for notice, etc.

Some furloughed staff would normally work the August bank holiday and others wouldn’t. Should we treat it as leave, furlough or both?

If furloughed employees would have worked the bank holiday, they should stay on furlough, receiving furlough pay, as if it were a working day. For furloughed employees who would normally take the bank holiday as leave, top up furlough pay to a day’s holiday pay or provide a day of holiday in lieu. There is ambiguity over whether you need an ‘agreement’ with an employee to take a bank holiday as leave during furlough. This shouldn’t be a problem if furlough letters state that contractual terms continue (except pay) – arguably, you can rely on any employment contract provisions which designate bank holidays as leave.

We’re getting in a mess with employees needing to ‘quarantine’ after foreign travel.

Hopefully, the Government’s list of exempt ‘travel corridor’ countries (where passengers are not required to self-isolate for the 14 day ‘quarantine’ period when travelling to England) has helped with this problem. However, the list is subject to review and, as we have recently seen with Spain, restrictions may be even more limited in future. Don’t forget that employees can work at home, if they are able to. You definitely can’t prevent employees from self-isolating if they have triggered the quarantine requirements, but you can introduce travel policy rules (particularly in relation to pay, notification and authorisation) to help you manage this type of absence effectively

How we can help

If you would like further support on holidays, furlough or quarantine and you are a Make UK member, please contact your adviser. Alternatively, non-members are welcome to call us 0808 168 5874 or email

CHECKLIST: Deciding your policy

Make UK Members can access our Checklist: Deciding your policy for managing employee absence due to quarantine after overseas travel, in the resources area as part of the Furlough Letters and Resources Pack. If you’re not a member, you can buy the pack online here.

Coronavirus FAQs

The FAQs on our website are also updated regularly and provide detailed guidance on holidays, shutdowns and other issues in relation to Covid-19.

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