Alan Price, CEO of BrightHR spoke to Business Leader about the implications of Bank holiday pay while on furlough.
With Friday being a bank holiday and many employees across the UK being furloughed, employers may be wondering how furlough interacts with annual leave, such as public holidays.
The first thing businesses should remember is that furloughed employees can take annual leave. However, they need to be paid in full for this time. This means that, for employers relying on the government grant to fund 80% of their wages, they will need to provide the remaining 20% themselves.
Despite the common misconception, staff do not automatically get bank holidays off, and whether they should have them off will depend upon the terms and conditions of an employee’s contract. If staff are contractually entitled to take bank holidays, they should be paid in full for any bank holidays that fall during a period of furlough. This means that with Good Friday being a designated bank holiday, full pay will be needed for Friday, 2 April.
If employers wish to avoid having to meet this payment, they will need to seek agreement from staff to take the day in lieu at a later date. That said, they should proceed carefully and make sure they can evidence that staff have agreed to it. This is not something that an employer should seek to enforce; such an action would technically be a breach of contract.
In situations where staff are not contractually permitted to take bank holidays off, it will be down to the employer if they will let furloughed staff have this bank holiday as leave and, therefore, fund the remaining 20%. If they do not allow workers to take this off, the bank holiday will have no impact on staff earnings or entitlement. However, they will need to let them take this time at a later date.