HR headaches for the holiday season

The UK government is easing legal restrictions in relation to domestic and foreign travel at a time when many employees have built up significant holiday entitlement and are longing for a break, if not a whole new approach to holidays. At the same time, the ever-changing situation makes it hard for everyone to make plans, with businesses that have made redundancies facing especially tough resourcing challenges. As a result, novel questions are being raised about employee rights and policy approaches in relation to holidays.

In our first article, we looked at the legal issues associated with employees asking to extend their holiday abroad by working remotely from their overseas destination. In this article, we consider some of the other holiday-related issues that employers may confront in summer 2021 and beyond.

Employees holidaying abroad

The UK is operating a traffic light system to categorise countries according to their number of Covid-19 cases and the success of their vaccine rollouts. Although there is likely to be some regional variation between England, Wales, Scotland and Northern Ireland, the basic principles seem to be broadly the same.

The current legal rules are focused on the position on return to the UK. Destination countries are likely to have their own rules and requirements.

Under the English rules, if individuals are travelling to a country on the green list, they will need to fill out a locator form and take a test at their destination before making their return journey to England. They will also need to take a PCR Covid-19 test on or before day two after their arrival in England. Assuming the test is negative, there are no quarantine or self-isolation requirements.

There are further obligations when returning from an amber-list country. In addition to the green-list requirements, individuals will have to self-isolate at home for ten days, assuming they have a negative PCR test on days two and eight after their return. It may be possible to participate in the “test and release” scheme from day five.

If individuals are returning from a country on the red list, in addition to the green and amber-list requirements, they will have to pay to quarantine in a hotel for ten days. There is no option to participate in the test and release scheme.

As was the case last summer, employers should consider and publish their approach. The traffic light system has been criticised, mainly because it has been accompanied by ministerial statements that overseas travel should be exceptional and Foreign and Commonwealth Office guidance that travel to most amber-list countries should be avoided unless essential. As a result of the messaging from the governments across the UK, employers may decide to take a more stringent approach to overseas holiday than last summer, when the traffic light system was consistent with advice and guidance about travel for holiday. Employers do not normally ask what employees are planning to do with their time off before approving holiday requests, but some employers may now consider asking employees to let them know if they plan to travel to a red or amber country so that they can plan accordingly.

How to deal with quarantine and self-isolation requirements

If an employee is required to quarantine and self-isolate, this time can be treated in various ways:

• The employee works from home, as usual.

• The employee extends their holiday, with the additional time coming out of their overall leave entitlement - even if that would mean exercising a discretion to allow the employee to take a longer “block” of holiday than would ordinarily be allowed.

• The employee takes unpaid leave.

• The employee is regarded as having committed a disciplinary offence on the basis that they have knowingly made themselves unavailable for work.

The most common approach last summer was extended holiday or unpaid leave, if the employee could not work from home. However, many employers have needed to make redundancies over the past year which makes resourcing more challenging, particularly over the school holidays. Treating this is a disciplinary matter is becoming more common, especially where the employer will have costs associated with arranging unexpected cover (e.g. overtime or temporary workers).

If employees can easily work from home (or possibly their quarantine hotel), it may be difficult to justify disciplinary action or withholding pay. But if you are encouraging a return to the workplace from 21 June (if the guidance on working from home is lifted) and in-person meetings are essential, you could factor that consideration into your decision. Some employers are looking towards a company-wide approach, to avoid stoking resentment where some employees have jobs that can be done remotely while others do not.

What if the destination country is recategorised?

Last summer, the UK government recategorised countries on a regular basis and at short notice. Some employees were caught out and found that they were unavailable for work as a result of the restrictions or self-isolation requirements. Your policy should therefore cover these types of scenario.

It is likely to be much more difficult to justify disciplinary action if the employee’s destination country is recategorised from green to amber or red during their holiday, although there may be regional variations. In Wales, for example, the government has been clear from the outset that only essential travel should be booked in the first place. 

We expect that the most likely approach will be along the lines of that adopted last year, with employers requiring employees to take unpaid leave or use their holiday entitlement for the quarantine or self-isolation period if they cannot work from home. Some employers may take a more stringent approach if the recategorisation occurs after the employee has booked but before they travel.

As happened last summer, there may be employees who could ordinarily work from home but as a result of travel disruption end up being stuck abroad. In these cases, you will need to consider your policy on remote working abroad. If remote working is not possible, you are likely to want to fall back on unpaid leave or extended holiday. 

Managing accumulated holidays

Employees may have accumulated large amounts of holiday over the 2020/2021 holiday years. The Working Time Regulations (WTR) were amended in 2020 to allow employees to carry over up to four weeks of annual leave into the next two leave years, in circumstances where it was not “reasonably practicable” to take leave as a result of the pandemic. This was aimed at supporting employers and employees where the pandemic has made it operationally difficult for employees to take time off, such as in the health and care sectors. Employers do not need to notify employees that they can carry over holiday if they cannot take it, but nor does an employee have to say that they will be carrying it forward.

Employers should be encouraging employees and workers to continue to take their annual leave for several reasons, including to promote physical and mental wellness. It is important to remember that payment in lieu of accrued but unused statutory holiday is only permitted on the termination of employment, so it is not possible to “buy out” large amounts of accumulated leave. Instead, employers should consider reviewing annual leave entitlements across the business and requiring employees to take a specific proportion of their leave by a set deadline.

Dealing with last-minute holiday requests

The UK government has indicated that it will review the traffic light system on a three-weekly basis. Employees that are yearning for a long-awaited holiday abroad may therefore be keeping a watchful eye on the updates, while others may take advantage of last-minute UK options.

This could lead to an increase in late holiday requests. You should review what your employment contracts say about how much notice employees are required to give before taking holiday. Unless the contract says otherwise, the statutory position is that employees must provide twice as many days in advance of the first day as the number of days holiday requested – for example, ten days’ notice of a five-day holiday. If operationally viable, you may want to allow holiday requests at short notice if you know there is a large amount of accumulated holiday within your business. More broadly, this may be an opportune time to review your contracts and holiday policies.

Employees’ late requests to reschedule their holiday

Employees do not have any legal rights to cancel and reschedule holidays once booked, apart from in cases of sickness/family leave or as set out in the employment contract. Note, however, that the Acas guidance on holidays during coronavirus recommends flexibility.

According to EU case law (which is still binding despite the UK’s withdrawal from the EU), employees who cannot take their holiday because they are sick have the right to cancel it and take it later. This applies only to the four-week minimum holiday entitlement under the EU Working Time Directive, not to any holiday over and above that. In practice, this means that employees who come down with Covid-19 may be entitled to reschedule their holiday.

Employees may also ask to reschedule their holiday if they are not sick but self-isolating because someone at home or a close contact has tested positive for Covid-19. Individuals in this position may prefer to reschedule their holiday rather than spend it at home in quarantine. While employees following instructions or official advice to self-isolate may be entitled to statutory sick pay if they cannot work from home, this does not necessarily mean that the EU right to reschedule holiday applies.

Employees planning to travel abroad may change their mind if their destination country is recategorised. In these situations, you could still insist on the employee taking their booked holiday, even if they no longer have anywhere to travel to. This may be a contentious issue, however, if the employee wanted to see family abroad and refusing a rescheduling request leaves them with insufficient holiday to travel to see family later in the year (if that becomes possible).

It is sensible to set out some guideline principles on how rescheduling requests will be dealt with, to ensure that you apply any discretions fairly and consistently. For example, it might be sensible to ensure that employees have used a certain percentage of their holiday before the end of August, which should help to avoid a significant amount of absence later in the year if restrictions continue to ease.

Monitoring employee location

Some employers have been considering whether they can use location data to monitor where employees are working from, especially where they have turned down a request to work remotely overseas but are concerned the employee may decide to go anyway. It may be possible to argue that there is a legal basis for processing the information - for example, because it is necessary for the employer’s legitimate interests and/or for it to comply with its legal obligations. However, the employer will still need to consider whether this is true in the circumstances and whether the action is proportionate, given the specific risks it faces. Moreover, if an employer is planning to use this type of monitoring it is important that it both makes employees aware of what is happening and implements a new Data Protection Impact Assessment - or updates an existing one - in order to reflect this.

Longer-term holiday policy

Some employers may be looking to redefine their employee benefits package as part of planning for the “new normal”. If you are moving away from a rigid approach to in-office working hours, a more flexible holiday entitlement may be more suitable.

For example, up until now, many employers have restricted the length of any single holiday period to two consecutive working weeks. Will some now look to remove this upper limit and permit employees to take longer periods of leave? More radically, will more UK employers start to adopt the US-style “unlimited vacation” trend? If you are reassessing your holiday deal, here are some of the issues to consider:

• Employees may initially be pleased to hear they can take longer periods of annual leave, but you should still consider the welfare implications. If employees can take almost all their leave in one go, the chances of burnout may significantly increase.

• Research suggests that unlimited holiday entitlements in practice result in fewer holidays being taken. There will need to be management buy-in to ensure that employees truly feel empowered to take leave and that the overall effect is not to discourage employees from having a break from work.

• If considering offering unlimited holiday, you will need to have in place a clear process for employees to request leave and for the employer to reject leave requests if they are not operationally practical. You will also need to think about how to ensure compliance with the WTR, which entitle workers to 5.6 week’s holiday each year and to payment in lieu of accrued but untaken holiday on termination. If you do not track holiday at all, you risk claims that employees are not being allowed to take their entitlement and complexity over termination payments. One approach is to agree a baseline entitlement in line with the WTR but offer additional “unlimited” holiday on top.