21 March 2018

Agency workers entitlement to holiday pay: term-by-term rather than package approach preferred

Kocur v (1) Angard Staffing Solutions Ltd (2) Royal Mail Group Ltd EAT/0181/17

Why care?

The Agency Workers Regulations 2010 (AWR) require agency workers to receive the "same basic working and employment conditions" once they have undertaken the same role with a hirer for 12 weeks that they would have been entitled to for doing the same job had they been recruited by the hirer rather than through the services of a temporary work agency. This entitlement includes terms and conditions relating to pay, duration of working time, night work, rest periods, rest breaks and annual leave.

The case

Angard Staffing Solutions Ltd (Angard) is an employment agency supplying temporary workers, including Mr Kocur, to Royal Mail where they worked alongside Royal Mail's permanent employees. Once Mr Kocur had worked at Royal Mail for over 12 weeks, he was entitled to the same basic working and employment conditions as he would have received had he been recruited directly by Royal Mail. Although employees and agency workers had a one-hour rest break each day employees were paid for the full hour, but agency workers were only paid for 30 minutes of it. Employees received 30.5 days' annual leave, but agency workers only received 28 days. However, the agency workers received an enhanced hourly rate of pay. They were paid

£10.50 per hour whereas Royal Mail employees were paid £9.60. Mr Kocur was dissatisfied with these differences and brought an employment tribunal claim, asserting that the AWR had been breached.

The tribunal dismissed his claims that he should be entitled to the same weekly working hours, annual leave and paid rest breaks as Royal Mail's employees. The less generous rest break and annual leave entitlements were compensated for by the enhanced hourly pay. Mr Kocur’s higher rate was, in effect, a rolled-up rate, and that he chose not to work on 2.5 days per year he would receive overall equivalent treatment. The higher rate also covered the half-hour per day difference in paid rest breaks.

Mr Kocur appealed. The EAT held that although such holiday arrangements would not be prohibited in principle, the basic working and employment conditions of agency workers should be "at least those that would apply if they are being recruited directly i.e. a minimum level of entitlement. A voluntary allocation of leave by the worker does not amount to an "entitlement" and the EAT could not see how the additional 2.5 days' leave could be enforced. The payment said to compensate for this leave was neither transparent nor readily comprehensible, and so there was a breach of AWR.

In relation to rest breaks, the EAT held that the failure to pay for the full hour was also a breach of AWR because Mr Kocur was effectively paid only £5.25 for his rest break, whereas his employed colleagues were paid £9.60 and although payment for the whole rest break could be rolled-up into hourly pay, this would have to be done in a transparent way.

What to take away

Providing an agency worker with an enhanced hourly rate of pay did not compensate for a hirer not providing an agency worker with the same annual leave entitlement and paid rest breaks as the hirer's permanent employees. The EAT has held that a term-by-term approach rather than a package approach should be adopted in comparing terms and conditions which is similar to the position in discrimination and equal pay cases, where less favourable treatment in one area of employment terms cannot be offset by more favourable treatment in another.

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