Can an employee take annual leave while on furlough?
Government guidance on Holiday entitlement and pay during coronavirus (COVID-19) confirms that furloughed employees can take annual leave, without the furlough period being disrupted. Employers must pay furloughed employees their normal rate of pay for a period of holiday, rather than any reduced amount they receive during the furlough. They must top up the amount they can claim under the Coronavirus Job Retention Scheme.
Many employers that have furloughed employees will not be in a financial position to pay them in full during annual leave. These employers can refuse any requests for annual leave during the furlough period by giving the required notice. Employees will be able to carry over unused leave in some circumstances (see When can annual leave be carried over due to the coronavirus crisis?).
Where an employer can afford to top up the pay of a furloughed employee, it may consider requiring them to take annual leave during the period of furlough. Whether or not this can be done in compliance with the Working Time Regulations 1998 (SI 1998/1833) remains uncertain (see Can an employer require employees to use their annual leave during the coronavirus outbreak?).