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Holiday, what holiday?

The coronavirus pandemic and subsequent lockdown has affected people in a variety of ways. Some employees have been furloughed or laid off altogether while others have been called upon to work even harder than usual – delivery drivers, for example, or those employed by supermarkets, online retailers and the NHS. It is hard to imagine anyone escaping without at least some disruption to their working lives. 

Holidays have been a major casualty, too, especially for those who were planning to travel abroad this year. Many have postponed their vacation in the hope that some measure of normality will eventually be restored. And therein lies the problem for employers; if too many people try to take time off in the latter part of this year, the result is likely to be chaos.

A lot of companies traditionally operate a policy whereby if you have not taken your statutory leave by the end of the calendar year you will lose it. But, in anticipation of the problem, the Government decreed back in March that all workers would be allowed to carry over any holiday entitlement for two years, which sounds very fair. The only problem is that 2021 is the year when companies of all sizes will be trying to claw back what they lost in 2020 and face the additional challenge of life after Brexit. They will most likely need all their workers to be available. 

One solution could be to compensate workers by paying them in lieu of time off. For larger companies this may not present a problem, but if you are an SME – and they account for 99% of all UK companies – it is not so straightforward. 

One study estimates that to pay ten employees on the average wage half their holiday entitlement would result in a bill of £10k; to compensate 250 employees would cost £255,000. For many SMEs, this alternative would simply not be viable, particularly if sales have dropped due to COVID-19.

It is hardly surprising that an estimated 50% of SMEs are still grappling with the problem of what to do. On the one hand, owners have to think about what is best for their business; on the other, they have to give some thought as to what is best for their workforce. People need to take a break for reasons of mental health and wellbeing – you could even argue that, with all the pressures of 2020, they need it more than ever! 


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