We’re delighted that the government has listened to us and will make it easier for temps and contractors to receive the holiday that is rightfully theirs! The government intends to make rolled-up holiday pay lawful, so you will be able to choose to receive your holiday pay at the same time as normal pay, as opposed to accruing it for when you take time off. The proposal was one of a raft of announcements made as part of the government’s vision for smarter regulation after leaving the EU, found here.
We previously responded to the government’s Holiday Entitlement Consultation, which closed in March, making it clear that rolled-up holiday pay is the only way temporary workers receive what’s rightfully theirs in holiday pay.
Last year, the umbrella sector was hit by scandal when it was revealed that some umbrellas and recruitment agencies profit by systematically making it difficult for workers to claim their accrued holiday, and retaining unclaimed monies as their own.
Losing holiday pay in this way is particularly galling given that the company hiring the worker has paid for their holiday entitlement as part of the agreed rate for that workers’ services. Hence some commentators describe this practice as theft – because the holiday pay has been given to the umbrella on the understanding that it will be duly passed on to the worker!
The issue is that rolled-up holiday is unlawful in the UK following an European Court of Justice decision in 2006 that it is incompatible with working time regulations, i.e. you should be paid whilst taking a break. However, rolled-up holiday pay does ensure that temps receive their entitlement, rather than being ripped off by unscrupulous umbrellas or agencies. It means that temporary workers can receive holiday pay on top of their wages, so there will be no excuse for the unethical practice of with-holding holiday. It could boost workers’ pay packets by thousands every year.
As things currently stand, millions of pounds of holiday pay is unclaimed every year because temps and contractors don’t realise they’re entitled to it. That is unacceptable, and that is why we lobbied for rolled-up holiday to be lawful – to ensure everyone can receive what is rightfully theirs.