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Employment Law Case Update: Furloughed Agency Worker

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The last year has introduced us to new Employment Law terms, specifically the concept of furlough leave.  This has given rise to many different questions and potential tribunal cases and today, our Employment Law team review the case of Miss K Healy v Start People Limited 2021 which is possibly the first of many which will involve furlough.  In this case, the Employment Tribunal (ET) had to decide whether a staffing agency was required to pay holiday pay to a temporary worker who had been placed on furlough. 

Miss Healy worked for Start People Limited, a staffing agency, from 25 February 2020 until her resignation on 31 July 2020. During her employment, she worked a single assignment from her start date until 24 March. At this time, the Government had announced the Coronavirus Job Retention Scheme (CJRS) and the end client asked the employer to place Miss Healy on furlough, which they did. Miss Healy never returned to her assignment and eventually resigned from her employer. 

The employer paid Miss Healy her accrued holiday pay for the 20 days she worked, but did not pay her any holiday pay for the period after she was placed on furlough.

Miss Healy subsequently brought a claim against her former employer for unlawful deduction of wages.

The employer relied on Government guidance to justify not paying holiday pay to Miss Healy. This guidance read: “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.”

The employer argued that Miss Healy’s contract did not require her to be paid holiday pay between assignments and so they were not required to pay her holiday pay for the period she was furloughed.

The ET found that whether or not the employer was required to pay Miss Healy holiday pay between assignments was irrelevant. Judge Shore stated that the “key point is that furlough does not affect the terms of the workers contract,” and that because Miss Healy was placed on furlough, her assignment did not end. She therefore was not between assignments” and continued to accrue holiday.

The ET found that Miss Healy had accrued 10 days’ holiday during the period of furlough and ordered the employer to pay her £650.

This case may provide some guidance to employers on how they should calculate holiday entitlement for furloughed agency workers. According to this case, if an agency worker is placed on furlough before the termination of their assignment, they will continue to accrue holiday the same as any other worker. However, this is a first instance decision and is not binding on future tribunals.

If you have any questions regarding this article, you can call our Employment team today on 023 8071 7717 or email employment@warnergoodman.co.uk.  If you have questions regarding furlough leave, you can visit our Covid-19 News Hub for more articles on the topic.

This was previously part of our weekly Employment Law Newsletter. If you would like to subscribe, please email us at events@warnergoodman.co.uk or just fill in our subscription form.

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.