The COVID-19 pandemic and support schemes in place for businesses have caused confusion for both employers and employees, and as a result we are anticipating an increase in employment tribunals. A recent employment tribunal has found a recruitment agency incorrectly withheld holiday pay from a worker while she was on furlough, due to misunderstanding how the furlough scheme affected existing contracts.

A worker, Miss Healy, began working for Start People, a temporary employment agency in February 2020. When lockdown restrictions were introduced in March 2020 and the Coronavirus Job Retention Scheme (CJRS) was announced, Miss Healy was furloughed mid-assignment. In July 2020 the claimant resigned; then becoming aware that she may have a claim for accrued holiday pay.

Almost all workers are legally entitled to 5.6 weeks paid holiday per year, by law. Only workers who are genuinely self-employed are exempt from this entitlement. When the CJRS was introduced in March 2020, existing laws were not amended and all workers retained the same rights as before the introduction of the scheme.

At the employment tribunal hearing last month, Start People said it relied on the advice on the government’s website and an article on the website of a national law firm to justify its refusal to pay accrued holiday pay.

The government website states: “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. Contracts may nevertheless include holiday provisions which will continue to operate in the same way as they did prior to the furlough period.”

Start People claimed that Healy’s contract did not state she would be paid holiday pay between assignments. However, the tribunal found this point was not valid as furlough does not affect the terms of a worker’s contract. This meant that Healy’s assignment for the end client had not finished.

Employment judge Stephen Shore calculated that Healy had accrued 10 days’ leave while on furlough and ordered Start People to pay her £650 before tax and National Insurance deductions.

This case highlights that while online advice can be useful, it should not be used as a replacement for hr advice. The importance of consulting qualified hr advice cannot be underestimated – if you believe your small or medium business could benefit from expert hr advice, or you have concerns about potential employment tribunals, advo can help. Contact us today to start a conversation.