Last reviewed 5 July 2021

The REC (Recruitment and Employment Confederation) has described a recent employment tribunal ruling as a significant move that provides much needed clarity for UK recruitment agencies.

Having heard the case of Mr D Perkins v The Best Connection Group Limited (TBCGL), the tribunal decided that, for the period that the claimant was on furlough, he was not a worker for the purposes of the Working Time Regulations 1998 and therefore did not accrue annual leave during that time.

Analysis of the claimant’s contract with TBCGL also highlighted that the agreement only existed when he was on assignment, the REC has highlighted.

Specifically,Mr Perkins would not “receive payment from TBC or its clients for any time not spent on assignment whether in respect of holidays, illness or absence for any other reason.”

The judge ruled that the claimant was unable to work for TBCGL while on furlough and therefore could not claim to be on assignment.

The REC points out that the ruling is in line with Government guidance on holiday entitlement and pay during the pandemic, available at https://www.gov.uk/guidance/holiday-entitlement-and-pay-during-coronavirus-covid-19.

However, it emphasises that this is not statutory guidance and, furthermore, that the current ruling is a first instance decision, meaning that other employment tribunals presented with similar cases could reach a different decision.

Lorraine Laryea, REC Director of Recruitment Standards and Compliance, has explained that one of the major issues for recruiters in 2020, as they considered whether to engage with the new Coronavirus Job Retention Scheme (CJRS) to furlough temporary workers, was whether holiday and holiday pay would accrue for those workers who were placed on furlough.

“The analysis in this case, which draws out the specific nature of temporary workers on contracts for services and the interaction with the holiday pay legislation and furlough provisions, is compelling,” she went on, “and in the view of the REC more accurately reflects how the law should apply in these types of claims.”

Miss K Healy v Start People Ltd

Following up the point made above that other tribunals might come to a different conclusion with regard to furlough and holiday pay, it is worth looking at a case that was reported in April 2021.

Miss K Healy v Start People Ltd also concerned a claim of unauthorised deduction of wages in respect of holiday pay accrued but not paid because the claimant was on furlough before she resigned from the company.

In this case, however, the details of which can be found at https://assets.publishing.service.gov.uk/media/6093ce38d3bf7f6d5ef65dfd/Miss_K_Healy_v_Start_People_Limited_2502140-2020_Judgment.pdf, the tribunal ruled that the claim of unauthorised deduction of wages was well-founded.

It said: “The respondent shall pay the claimant 10 days’ accrued holiday pay at £65.00 per day = £650.00 less any required deductions for tax and National Insurance.”