Government urged to end rolled-up holiday pay ‘stigma’, as consultation closes 

The government has been urged to end the stigma that surrounds rolled-up holiday pay, which leads to hundreds of millions of pounds of holiday pay going unclaimed every year.

Responding to the government’s Holiday Entitlement Consultation, which closes today, IWORK (the body that empowers temporary workers) made clear it’s the “only way” to guarantee that temporary workers receive what’s rightfully theirs in holiday pay.

If holiday pay is rolled-up, it’s paid at the same time as normal pay – as opposed to being paid when the worker takes holiday.

In the consultation, stakeholders were invited to share opinions on proposed changes to how holiday entitlement is calculated for part-time and irregular hours workers, as the government looks to simplify the process.

Launched in light of a Supreme Court judgment in July 2022, the landmark Harpur Trust v Brazel case, the government invited opinions on using a simplified 12.07% method to calculate holiday entitlement for temporary workers. This method was the previously accepted custom and practice until last year’s judgment which concluded it should no longer be used.

In addition to calling on the government to “press on” with the proposal, Julia Kermode, founder of IWORK, said: “It’s time to end the stigma surrounding rolled-up holiday pay. It’s seen as unlawful due to a European court ruling, which is totally out of step with the real world. Some argue that paying workers for their holiday on top of wages is a disincentive for them to take a paid break. I’d argue that at least it ensures they receive what’s rightfully theirs.

“All too often we see unscrupulous umbrella companies and recruitment agencies retain unclaimed holiday pay from their workers. These are hardworking people who very often don’t even realise they’re entitled to holiday pay – let alone receive clear instructions to claim it.

“Kudos to the government for launching this consultation and recognising that holiday needs to be simplified. But policymakers are missing a trick. Holiday doesn’t just need simplifying – it needs to be made fair, too. This needs to be made crystal clear by the government, despite what the European court says. Every temp should have the right to decide how and when they receive their holiday and stop being ripped off.”