Many weeks after it was needed, the Government has finally published guidance on how statutory rights to holiday and holiday pay under the Working Time Regulations 1998 dovetail with furlough and other aspects of the coronavirus crisis. This has, understandably, been a headache for many RMI members.

In summary the guidance deals with a number of issues, including:-

  • Furloughed workers continue to accrue annual leave.
  • Furloughed workers can take holiday without bringing furlough to an end.
  • Holiday pay should be "the correct holiday pay in accordance with the current legislation" (i.e. normal remuneration, not 80% or basic).
  • It goes on to consider and give examples of when it will be "not reasonably practicable" for a worker to take some or all of their annual leave due to the coronavirus, thereby enabling them to carry over leave into the following 2 years.
  • As we say, there are other matters covered, so it's definitely worth a read. Our further comments would be as follows :-
  • The guidance is confirmation of the advice that we at MILS have been giving over the last few weeks.
  • Although this will obviously be persuasive, note that this is still "guidance" and has no legal authority. Employment Tribunals would not be bound to take account of it (in the same way as, for example, they would with ACAS Codes of Practice).
  • The guidance does suggest that an employer can give notice under Regulation 15 of the Working Time Regulations 1998 requiring employees to take holiday whilst on furlough.

The guidance isn't very long and is worth a full read. It can be found at

What questions remain?

There remains a question as to whether any holiday taken during the furlough period/ lockdown qualifies as holiday for employment law. The guidance comments that,

"…the employer should consider whether any restrictions to the worker is under, such as the need to socially distance or self-isolate, would prevent the worker from resting, relaxing and enjoying leisure time, which is the fundamental purpose of holiday".

As many employers are indeed utilising Regulation 15, in order to manage future holiday, we can expect some future litigation as to whether or not holiday taken during furlough meets the definition of annual leave set down in ECJ case law.

Motor Industry Legal Services

Motor Industry Legal Services (MILS Legal Ltd) provides fully comprehensive legal advice and representation to UK motor retailers for one annual fee. It is the only law firm in the UK which specialises in motor law and motor trade law. MILS currently advises over 1,000 individual businesses within the sector as well as the Retail Motor Industry Federation (RMI) and its members.