Holiday Pay on Furlough Does Not Accrue, Tribunal Rules

holiday pay

An employment tribunal in Cardiff has ruled that an agency worker did not accrue holiday pay on furlough.

Workers are entitled to a week’s pay for each week of statutory leave that they take. Most workers are entitled to 5.6 weeks’ paid holiday a year. 


Perkins, an agency worker, would carry out assignments from workforce supplier, The Best Connection Group. Furthermore, the tribunal would come about as Perkins would bring a claim for a lack of holiday payments while under furlough.

The claim would total £261 in lost payments and £261 in accrued holiday pay on furlough.

The tribunal would take side with the agency and agree that Perkins is not an employee as set out within the Working Time Regulations 1998, while on furlough. As a result of this, Perkins would not accrue holiday pay for this period.

Furthermore, the tribunal would come to this decision as Perkins’ contract only existed while he was on an assignment. Thus holiday taken between assignments for contractors does not accrue pay.

The agreement between Perkins and The Best Connection Group set out that he would not receive payments for time outside of assignments. This agreement would extend to Illness, holiday, absence or any other reason.

The judge within this case, Rachel Hartfield, would concur that the inability to accrue holiday was clear within the terms and agreements signed by Perkins.

Perkins would admit he had not received holiday pay for time not spent on assignments prior to his furlough period.

What is the Government Guidance on Accrued Pay

The government guidance is that agency workers on furlough may have no entitlement to the accrual of holiday under the Working Time Regulations. This is because they are not by definition “workers” under the regulations between and when not working on assignments.

Implications for Future Cases

Lorraine Laryea, director of recruitment standards and compliance at the REC highlights the previous confusion that surrounds this issue. She also mentions how although this case is quite conclusive, the verdict may still be out on future cases.

“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”

Lorraine Laryea, director of recruitment standards and compliance at the REC

Laryea would also state that the analysis of this case by the tribunal is compelling. She would concur that the decision made is how the law should apply in these cases.

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