The Recruitment and Employment Confederation (REC) is raising concerns over the Gangmaster and Labour Abuse Authority’s recently published holiday pay brief.

According to the REC, the GLAA’s brief, which sets out their position on the treatment of holiday pay and how to comply with their licensing standards, will have a significant impact on licence holders who use a contract for services for their workers if not amended.

The GLAA briefing note, published on 3 November, was written following the Supreme Court decision of Harpur v Brazel, which was handed down in July 2022.

In the briefing, the GLAA states that calculating the annual leave entitlement for certain workers under contract, including casual, irregular, and/or zero-hours and workers who work part of the year using an accrual system (which only considers the days on which the worker has worked) using a formula of 0.1207 or similar is not a valid method of calculating annual leave entitlement. The GLAA cited the Supreme Court’s judgement in The Harpur Trust v Brazel [2022][6], in which the Court ruled that the use of a percentage method in calculating the holiday entitlement of workers with irregular hours is inconsistent with the Working Time Regulations 1998.

“The GLAA has observed increasing reliance on contracts that contain terms stating that the contract between the worker and the applicant or licence holder does not exist or does not subsist between assignments,” the GLAA stated.

“For the avoidance of doubt, the GLAA does not consider, as a general rule, that the presence of these contractual terms relieves an applicant or licence holder of its responsibility to provide workers with a minimum of 5.6 weeks paid holiday,” the GLAA added. “This is because the GLAA does not consider such terms to accurately reflect the reality of the typical worker-licence applicant/holder relationship, or to be compatible with other standard terms of the typical contract.”

Separately, the GLAA has contacted the REC directly and suggested that the REC’s contract for services, which provides for there being no contract between assignments, will not be compatible with their Licensing Standards in the future, but there will be an ‘amnesty’ until spring 2024 before they enforce this.

The REC dispute this interpretation of the Harpur Trust case in the strongest terms.

In a letter to the GLAA, Neil Carberry, Chief Executive for the REC, said, “Using this judgment to reach the conclusions presented in your letter represents GLAA making employment law, which is not your role. It is a huge shift from the original scope of the ruling.”

“Our view, supported by our own solicitors and widely-held in the employment law community, is that the Harpur Trust v Brazel case made no finding whatsoever on overarching contracts linking different contracts for services,” Carberry continued. “There was no dispute in Harpur Trust regarding whether the claimant was employed all year round. The claimant was a part-year employee, which is very different from a contract for services worker.”

“The REC supports the GLAA’s position that all licence holders must always calculate holiday pay correctly, in line with the statutory requirements. However, we are adamant that the decision in Harpur v Brazel did not dispute her employment status and the fact that she was employed all year round,” Carberry added.

The REC is working with stakeholders including the ALP (Association of Labour Providers) to seek an urgent meeting with the GLAA to understand the legal basis for Brief 82 and to find a workable solution for REC members, and all agencies.

Currently, the GLAA have included an ‘amnesty’ which will run until 5 April 2024 to accommodate their updated position.

“During this period of amnesty no new applicants, and no existing licence holders who undergo a compliance inspection, will be deemed to have failed Licensing Standard 2.5 if the systems, processes and methods they have in place for calculating workers’ annual leave entitlement and holiday pay are not compliant with the law as outlined in this guidance,” the GLAA stated.

SIA reached out to GLAA for further comment.

A spokesperson for the Gangmasters and Labour Abuse Authority (GLAA) told SIA, “Holiday pay forms a key part of the GLAA’s licensing standards and licence holders must maintain records to show that a worker receives paid annual leave to which they are legally entitled. We will work with the industry and compliant businesses to stop labour exploitation, create a level playing field across our regulated sectors, and ensure all workers receive the rights they are entitled to."