Furlough: Agency workers should receive holiday pay
In a recent Judgment, an Employment Tribunal (ET) has awarded a claimant (who was a worker contracted through an agency) holiday pay that accrued during their time on furlough. This case highlights potential unintended consequences of placing agency workers on furlough under the Coronavirus Job Retention Scheme (Scheme).
In K Healy v Start People Limited, the claimant brought a claim for unpaid holiday pay against her agency in respect of holiday that had accrued during the time she spent on furlough. The agency attempted to rely on government guidance issued at the time which stated that ‘some agency workers’ would not be entitled to accrue holiday due to not being classed as workers between assignments. It is common for casual workers to have gaps between assignments and the agency tried to contend that this was the case here.
However, the ET decided that ‘the key point is that furlough does not affect the terms of the worker’s contract’. This meant that that the ET could only base its decision on the contract between the parties and the circumstances of the case. It found the assignment had not ended when the claimant had been placed on furlough. This meant that claimant continued to accrue holiday during the furlough period and was entitled to holiday pay on termination of the engagement.
This is a stark warning to agencies and employers to be wary of government ‘guidance’. The Scheme was rolled out quickly, continually updated and the rules were often ambiguous (if not contradictory). This Judgment focuses on whether the actual contractual relationship between the parties had changed – the employment judge clearly found that it had not. The effect of the Scheme was in fact very limited and did not change any contractual terms, including those relating to holiday entitlement.
If you have any questions about the Scheme, please email or call our Employment Law team today on 0113 207 0000.
Partner and Head of Employment
Employment Law
PKelly@LawBlacks.com
0113 227 9249
@PaulLawBlacks
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Paul Kelly
