Holiday pay and 'temporary' workers

[LadyWellian]

I was taken on by my current 'employer' during a recruitment freeze which meant they had to do it through a temp contract with an agency. It was agreed with my future bosses before I joined that I would be entitled to 5 weeks' paid holiday. I work four days a week.

The agency deducts a certain amount from my daily rate to cover holidays. For the sake of illustration let's say I agreed a rate of £100 a day and am getting paid £90 (I'm not but the percentages are the same).

So essentially, I am not paid the rate I agreed with them before I joined (and don't even get me started on the fact that I've been here three years with no pay rise).

I was able to get round this for the first year as the agency rolled up my holiday pay and would pay it out when I asked, so (with the encouragement of my bosses) I would put in timesheets saying I was here but in fact I would be on holiday.

However, from the second year the agency said they wanted to encourage people to take time off, so would only pay out holiday pay for days claimed as holiday.

At a stroke I have lost 10% of my income - and I've really felt it, what with inflation going up and the higher-rate tax threshold (which I was only just over) going down.

I can't get my head round it - surely a contract that says I will be paid £xx a day means I should be paid £xx a day, not £xx minus 10%? And surely paid holiday should mean holiday that is paid at the £xx a day I am supposed to be paid?

Or am I deluded? Our HR department are no help as a) I am not an employee (as they never tire of pointing out) and b) my principal contact there is a witch.

I'm a bit confused as to the difference tbh. Before you used to put in a timesheet for payment but be on holiday. Now they will pay out for days claimed as holiday. Isn't that the same thing? Weren't you claiming days as holiday before by putting in a timesheet for them but being on holiday?

The difference is that before they insisted you took holiday to get your holiday pay, they would pay out the accrued holiday pay to you when you asked. So as far as they were concerned I never actually took any holiday but took the accrued holiday pay as cash.

Sorry if I wasn't clear. This has been tying my brain up in knots.

I work for an agency.

It is really important to be absolutely clear whether the daily rate agreed included or excluded the holiday pay (which is usually calculated at 12.8% of what ever your daily rate is.

My agency would charge the client your daily rate eg £100 + the WTR element £12.80, and pay you £100 a day (minus tax and NI), the £12.80 would be paid to you when you took holiday. If you completed assignment without taking holiday, teh accrued amount would be paid to you then.

The other thing to consider now is the Agency Workers Regs - you have been there more than 12 weeks and you are entitled to be paid the same basic pay and conditions as a perm employee. The question to ask is whether anyone thre does a similar job to you (get the agency to ask the client) and are you paid the same (salary + holidays) as them. There is a lot of stuff on the internet about this.

Are you using an umbrella company for payment?

fedup it was the Agency Worker Directive that made me ask our HR person - she said I am now entitled to the same paid holiday as my employed colleagues, however she also pointed out that I am paid more than the comparable (employed) people in my team (presumably she is talking about basic salary). I can't see this as my problem, though - I was offered the job at the daily rate; I didn't say 'no, I will not do it unless you give me more than the others'.

Initially the company I work for (not the agency) told me as a non-employee I was not entitled to paid holiday, even though that is what I had agreed as part of the terms of joining.

It just strikes me that if someone says 'come and work for us, we will pay you (eg) £100 a day and give you five weeks' paid holiday', I should get paid (eg) £100 a day for the days at work and for the days I am on holiday. As it stands I am effectively paying myself when I am on holiday.

Also an invoice from the agency found its way to me once - I was beyond shocked that what they are charging my 'employer' is effectively 50% more than my gross weekly pay. Is that a normal margin?

I should just have set up a limited company at the outset - it's what a friend counselled me to do, but at the time I was still smarting from a recent redundancy and was psychologically unprepared for the responsibility of paying my own tax etc.

Grevling I'm not sure. I am paid by the agency, but they didn't find me the job - I found it myself. They are just doing the admin AFAIK.

It sounds like you are an employee. Not of the place where you work but of the agency. The agency as your employer should be paying you holiday pay. Just as any other employer, if you do not get a satisfactory response from them when you raise queries you have the right to complain and take cases to employment tribunals the same as any other employee.

Rolled up holiday is unlawful under the Working Time Directive. See here: www.direct.gov.uk/en/Employment/Employees/Timeoffandholidays/DG_10034711 particularly the bit where they say you should renegotiate your contract. Your contract is with the agency so you need to speak to them.

The fact you are paid more in salary than an employee of the company may well be very relevant. The provision for agency workers that came in last October says you must not be treated less favourably than an employee of your host organisation in certain regards, including holiday entitlement. The legislation specifically allows for agency workers to be paid an increased salary to compensate for any discrepancy so long as all statutory holiday rights (ie 5.6 weeks per annum for a full time employee) are given as a minimum. See here: www.acas.org.uk/index.aspx?articleid=1873 (The Dept BIS PDF is very good and well worth a look).

The issue of your day rate - again you need to negotiate with the agency. What the agency gets paid is not really your business and 50% is not that unusual I wouldn't have thought. However, what the agency pays you is very much your business and you can question them about that if you think it is unfair or a mistake has been made.

In short, you need to speak or write to the agency because you have a statutory right to paid holidays. If you also believe you are not being paid your proper day rate you also need to raise that. It is worth noting that the landmark case that made rolled up holiday unlawful was in 2006... well before your contract with the agency began. The case is Caulfield v Hanson Clay Products Ltd (formerly Marshall?s Clay Products Ltd) [2006] IRLR 386, ECJ.

Thanks Katie, I shall look at your links later.

There is some great advice above.

Disclaimer I am not an HR person but this is how I believe things work. You would need to check it out.
I would also point out that it is up to the agency to pay you the holiday pay as it it the agency who are employing you.
How they sort out with the company what the company pays them on your time off is down to them and should not involve you at all.
What is relevant is that you are entitled to the 28 days paid holiday to be paid by the agency.

(BTW it is legal for them to include bank holidays as part of the holiday so you only get 20 days plus bank holidays but only if this is what the company that you are working for do - if the company gives holidays plus bank holidays then you are entitled to that instead)

The law also states that you must take a minimum of 4 weeks holiday in any given holiday year and that you cannot roll these 4 weeks forward or be paid for them instead (if you have not had time off) any days above the 20 days off can be carried forward if agreed by the company. You cannot have extra pay in leiu of these days
In practice what lots of companies( if you are not working regular guaranteed hours) do is put the 12.8% holiday pay you are entitled to in addition to your gross daily rate into a holiday fund and use it to pay out your holiday time off as and when you request it ( although you must be taking time off to get it), but this should NOT be a deduction from your wages. I believe that this is illegal.

If you want some free impartial advice try ringing ACAS as they are very helpful.

Your contractual relationship is presumably with the agency? I would get them to investigate on your behalf.

Also if the agency is being paid that much, it may be that there is scope for negotiation.