An employment tribunal has ruled that an agency worker who received work assignments through a flexible workforce supplier did not accrue holiday pay while he was on furlough.
The Recruitment and Employment Confederation (REC) said the ruling, in the case of Mr D Perkins v The Best Connection Group, provided recruitment agencies with “much needed” clarity about entitlements during furlough.
Perkins, an agency worker who carried out assignments for The Best Connection Group, brought a claim for unpaid holiday pay while he was furloughed under the Coronavirus Job Retention Scheme (CJRS) from May to July 2020. He was seeking £261 in lost wages and £261 in accrued holiday pay.
The tribunal judge agreed with The Best Connection Group that he was not a “worker” for the purposes of the Working Time Regulations 1998 for the period that he was on furlough, and therefore did not accrue holiday pay during this time.
Furlough and holiday pay
The Cardiff tribunal came to this conclusion because Perkins’ contract with the agency only existed when he was on assignment with a client, and not between assignments.
The agreement between Perkins and the agency said that he would not “receive payment from TBC or its clients for any time not spent on assignment whether in respect of holidays, illness or absence for any other reason.”
The claimant admitted that he had not accrued holiday pay while he was not working on assignments for the company prior to the furlough period.
Employment judge Rachel Hartfield agreed that the terms and conditions signed by the claimant were clear that he would not accrue holiday pay when not on assignment.
Government guidance says: “Some agency workers on a contract for services may not be entitled to the accrual of holiday or to take holiday under the Working Time Regulations while on furlough because they are not workers or treated as workers under those regulations when between assignments or otherwise not working on assignments.”
Lorraine Laryea, director of recruitment standards and compliance at the REC, said the issue of holiday pay posed a challenge for recruiters when the furlough scheme was introduced.
“The REC lobbied the government extensively to release guidance on exactly this, which resulted in advice being published in May 2020. However, this isn’t statutory guidance and it’s important to bear in mind that the judgment is a first instance decision, meaning that other employment tribunals presented with similar cases could reach a different decision,” she said.
“However, the analysis in this case, which draws out the specific nature of temporary workers on contracts for services and the interaction with the holiday pay legislation and furlough provisions, is compelling and in the view of the REC more accurately reflects how the law should apply in these types of claims.”
In May an employment tribunal found that a temporary worker had been entitled to holiday pay while she was on furlough. The recruitment agency, Start People, claimed that the worker’s contract did not state she would be paid holiday pay between assignments. However, the tribunal found that the worker’s assignment for the end client had not finished.