Agency workers and holiday entitlement
The Agency Workers Regulations 2010 (“AWR”) provide that after 12 weeks’ service, an agency worker becomes entitled to equal treatment in comparison with permanent employees at the same place of work.
This point was raised in the case of Kocur v Angard Staffing Solutions Ltd where K, an agency staff member, was entitled to 28 days’ annual leave and a 30 minute break per day, as opposed to 30.5 days’ annual leave and a one-hour break for permanent staff. The business’ justification for this difference was that K was paid £10.50 per hour, compared to a permanent employees’ rate of £9.60 per hour. K brought a claim in the Employment Tribunal (ET) asserting that he should receive the same leave as his permanent counterparts.
The ET held that as K was paid the higher rate, this was considered as a rolled-up rate (including holiday pay). He could therefore choose not to work 2.5 days per year, and he would be no worse off. K appealed to the Employment Appeals Tribunal (EAT).
The EAT overruled the decision on the basis that the failure to confer additional leave could not be “compensated for” by K’s enhanced hourly rate. The AWR requires a term-by-term approach, meaning that each individual term in the agency contract must be no worse than what is stated in a permanent contract. However, there is nothing to prevent an agency worker’s contract being better than that of a permanent employee’s contract.
It was suggested by the EAT, that an employer could grant the agency worker 30.5 days’ annual leave, but only pay for 28, whilst maintaining the higher rate of pay. This could work where the agency worker is paid for their identical holiday entitlement by means of a lump sum at the end of the assignment. However, this arrangement must be transparent and the agency worker would have to be aware of the practice in relation to the precise element of their remuneration which relates to their annual leave entitlement.