Do UK Bank Holidays during Furlough need special consideration?
The furlough scheme is currently due to end on 30 April 2021 – but between now and then there will be two bank holidays.
What happens where a bank holiday falls during a period of furlough?
In 2021 Good Friday falls on 2 April and Easter Monday is on 5 April. Whilst both of these dates are designated as bank holidays employees have no statutory right to paid time off on these days. This is a matter for the employment contract.
The three most likely scenarios are that the contract provides bank holidays are: (1) deemed to be a normal working day; (2) included as part of a worker’s statutory minimum paid holiday entitlement; or (3) granted in addition to a worker’s statutory minimum paid holiday entitlement.
Where a worker is placed on furlough under the Coronavirus Job Retention Scheme they continue to accrue all holiday entitlement as normal. But what happens where a bank holiday falls during a period of furlough? For example, the worker is furloughed over the period that includes the two Easter bank holidays?
Assuming the employment contract deems bank holidays to be normal working days, the worker’s furlough will be unaffected.
On the other hand, where the worker would usually have had the bank holiday as annual leave, either as part of their statutory minimum paid holiday entitlement or in addition to it, there are two options available to you.
The first is that you agree the bank holiday can be taken as annual leave. In this situation, you must pay the correct rate of holiday pay that the worker would ordinarily receive (not the furlough rate). However, the period of furlough is uninterrupted.
The second is that you agree that the bank holiday is not taken as annual leave at the time, but it is instead deferred until a later date. This deferred date can be agreed in advance. Here the worker would receive their furlough pay rate on the two bank holidays.
When a bank holiday is deferred to a later date, you can set restrictions on when it can be taken, e.g. you could exclude certain dates or specify that it cannot be linked to another bank holiday.
Check out our other blog posts about the furlough scheme here.