Higher pay cannot offset inferior holiday entitlement under AWR

Kocur v Angard Staffing Solutions Ltd

Providing an agency worker with 28 days’ holiday and half-hour rest breaks when comparable permanent employees were entitled to 30.5 days’ holiday and rest breaks of one hour breached the Agency Workers Regulations (AWR).

The Agency Workers Regulations 2010 give two sorts of rights: Day 1 rights (e.g. same access to collective facilities and amenities) and, more significantly, 12-week rights, i.e. after a 12-week qualifying period the right to the same basic working and employment conditions in relation to certain terms.

Background

Mr Kocur was an agency worker who had worked for the hirer, Royal Mail, long enough to become entitled to 12-week rights and equal treatment with Royal Mail’s permanent staff under AWR, reg. 5. However, he was unhappy with certain aspects of his terms and conditions. In particular, he was given a one-hour break for each eight-hour night shift but was paid for only half an hour, whereas direct recruits were paid for the entire hour; and he was entitled to 28 days’ annual leave compared to direct recruits’ 30.5 days. However, Mr Kocur received highly hourly pay; £10.50 per hour as opposed to a comparable employee’s £9.60 per hour. A tribunal dismissed his claims under reg. 5 in relation to these matters. He appealed.

EAT decision

The EAT allowed his appeal. An agency or hirer cannot offset a failure to confer a specific AWR entitlement with a higher rate of pay. The entitlement is to the same basic terms and conditions as comparable employees on a ‘term-by-term’ basis with equal terms, not by comparing the overall package.

As to Mr Kocur’s leave entitlement, there was a breach of reg. 5. The EAT did not accept the tribunal’s view that Mr Kocur could choose not to work on 2.5 days per year; such an approach lacked transparency and it was difficult to see how it could be enforced. Moreover, the failure to give the additional leave could not be compensated for by Mr Kocur’s enhanced hourly rate of pay.

The EAT noted that the AWR doesn’t specify the way in which an agency worker must receive parity in relation to annual leave. Thus, if identical holiday pay was provided by a lump sum at assignment end, or in ‘rolled-up’ holiday pay, this would not, in principle, breach reg.5. But, emphasised the EAT, any such arrangements would have to be transparent, and the agency worker would have to be able to ascertain precisely what aspect of his or her remuneration relates to annual leave. In Mr Kocur’s case the payment said to compensate for the 2.5 days’ leave was neither transparent nor readily comprehensible.

As for Mr Kocur’s rest breaks, while there was no disparity in the length of his break (unlike his holiday entitlement), the difference in pay for the rest break (pay for half the time as against pay for all the time) was a breach of reg. 5. The term relating to rest breaks was not the same, and merely having a higher rate of pay cannot compensate this.

Link to judgment: http://www.bailii.org/uk/cases/UKEAT/2018/0181_17_2302.html

Comment

This decision makes it clear that under the AWR less favourable treatment in one respect, for example, providing less annual leave, cannot be offset with more favourable treatment in another respect, for example, by providing a higher hourly rate of pay. This is not new and is in keeping with the judicial approach taken in discrimination and equal pay cases.