Urgent Update on Furlough Scheme and Holidays

This e-bulletin does not examine the competing arguments about whether holiday can be taken whilst furloughed. But, for what it’s worth, I am confident that this is permissible as suggested in the guidance (as distinct from some of the case law).
 
The Issue
 
However, the guidance on the furlough scheme has, until now, been silent as to whether an employer can furlough an employee because the employee has chosen to take holiday for that period. This, of course, is now more likely because of the new flexible furlough scheme which allows an employee to be furloughed for a week or fortnight, as opposed to three weeks, now corresponding to the usual length of a holiday.
 
The Answer and New Guidance
 
Today the guidance has been updated to answer this question.  
 
An employer is not permitted to furlough an employee just because they are on holiday. This doesn’t mean that an employer can’t furlough an employee for a period encompassing or matching a pre-booked holiday period, simply, that the furlough can’t just be because the employee is on holiday.
 
Many employers and clients had intended to adopt this approach as the guidance was silent on this issue. However, now, our urgent advice to our clients (and to our own organisations) must be to not to attempt to use the flexible furlough scheme in this way, otherwise HMRC may be knocking on the door for a reclaim, or worse...

Richard Shepherd
Head of the Employment and Professional Disciplinary Team