Tribunal Awards Holiday Pay to Furloughed Temporary Worker

An employment tribunal has awarded holiday pay to a temporary worker who was furloughed by her recruitment company.  In the decision the judge found in the favour of Miss K Healy who claimed unauthorised deductions from her wages due to holiday pay being accrued but not paid during her period of furlough.  As a result of the decision, Miss Healy’s recruitment agency, Start People Ltd, is required to pay her 10 days accrued holiday.

Miss Healy worked on an assignment via Start People from 25 February 2020 until 24 March 2020 after which date she was furloughed by her end-client.  She did not work for the client again and resigned on 31 July 2020, after which point she submitted her claim for withheld holiday pay which had continued to accrue whilst furloughed.

The judgment refers to UK employment law which gives a statutory right for workers to receive 5.6 weeks paid holiday annually, unless they are genuinely self-employed.  This formed the basis of the tribunal decision that statutory holiday continued to accrue during Miss Healy’s period of furlough.  This tribunal decision is not binding for future cases.

Whilst it might seem unfair for agencies and umbrellas to deny their workers holiday accrual during furlough, it should be borne in mind  that the coronavirus job retention scheme (CJRS) was rushed in by the government in April 2020, and that there was significant confusion as to the detail surrounding holiday accrual for non-permanent workers.  In addition, the cost of statutory holiday is not reimbursed through the CJRS, so it would need to be paid out of the agency or umbrella’s own pockets which cumulatively is a very significant amount.  The commercial impact would have been business-ending for many.

Notwithstanding the commercial impact, it could be argued that there was an ethical duty to continue accruing holiday for all workers during furlough, and undoubtedly this case will send out shockwaves given that there will inevitably be many more workers with similar claims.

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