£2 Billion in Lost Holiday Pay: Key Findings from TUC Report and How Workers Can Take Action

New research conducted by the Trade Unions Congress has revealed that over a million workers failed to receive a single day of their holiday entitlement last year. This amounted to approximately £2 billion of lost holiday pay overall, or £1,800 of unpaid holiday pay per affected worker.

In this article, we consider the research findings in more detail and how the government is hoping to improve the situation going forward. We also discuss employees’ entitlement to holiday rights and holiday pay, and actions they can take if these rights are breached.

Key Findings from the TUC Report

The Trade Unions Congress has conducted an analysis of the Labour Force Survey 2023, particularly regarding workers’ holiday rights and whether these are being upheld by employers. For many workers, this is sadly not the case.

According to the report, around 1.1 million workers have lost holiday pay as they did not receive even one of the 28 days’ holiday to which they are entitled. Various factors appear to impact the severity of this state of affairs.

One such is ethnicity, with 6% of black and minority ethnic workers failing to take their holiday entitlement compared to 4% of white workers. Another relevant factor is salary, with low-paid workers such as waiters and waitresses, care workers, and kitchen and catering assistants losing out most frequently.

Denial of Holidays and Unrealistic Workloads Leading to Lost Holiday Pay

The Trade Unions Congress has identified several reasons why workers have lost holiday pay and rights. These include fear of unfavourable treatment, unrealistic workloads, deliberate denial of holidays, and employers not keeping up to date with employment rights in the UK. Moreover, the current lack of any effective methods of enforcement has enabled this situation to continue.

The TUC’s general secretary, Paul Nowak, has expressed disappointment with the research findings, blaming them largely on the former Conservative government. He stated, “The Conservative government sat back and let bad employers cheat their staff out of their basic workplace rights. Tory ministers were more concerned about stopping people getting what they were due by introducing anti-union measures, than funding enforcement bodies properly.”

Can the Fair Work Agency Help with Lost Holiday Pay?

It is hoped that the introduction of the Fair Work Agency will help to resolve the current issues with lost holiday pay and rights. The Fair Work Agency, promised by Labour during its election campaign, will be a single enforcement body with the aim of upholding workers’ employment rights in the UK. It will have the power to investigate employers, impose sanctions for bad employment practices, and ensure that workers’ rights are being upheld.

According to a poll conducted by the TUC, many are supportive of the introduction of the Fair Work Agency. 61% of voters in the UK are for this new approach to the enforcement of employment rights in the UK, with only 8% against it. This support comes from all political factions, with positivity being expressed by Conservative and Reform voters as well as those for Labour.

The TUC is highly optimistic of the impact which the Fair Work Agency will have. General Secretary Paul Nowak said, “Good employers have nothing to fear as they’re already playing by the rules. Now it’s time to level the playing field. Labour’s Fair Work Agency must have real teeth and hold rogue employers who think they are above the law to account.”

Understanding Workers’ Holiday Rights

Under the Working Time Regulations, UK workers are entitled to at least 5.6 weeks of annual leave each year. This equates to 28 days of holiday each year for a full-time worker or pro rata for those working part-time. Typically, these will include the eight public holidays in the UK and four weeks of additional holiday. Notably, workers are entitled to receive holiday pay during their annual leave.

Workers who work irregular hours will accrue holiday rights and holiday pay depending on how many hours they have worked. For those who work more than five days a week, holiday rights are capped at 28 days each year. Sometimes, it can be difficult to calculate the amount of holiday to which a specific worker is entitled. In this case, the government’s holiday entitlement calculator can be useful.

How Many Holidays Am I Entitled to?

The way in which holiday pay is calculated depends on the type of work in question. For those working regular hours for a fixed amount of pay, one week’s holiday pay is the same as pay for one week’s work. For those working irregular hours, one week’s holiday pay is calculated based on their average pay from the previous 52 weeks.

Holiday rights, including holiday pay rights, are unaffected by maternity, paternity, and adoption leave. This means that workers will still accrue holiday and holiday pay while they are on maternity, paternity, or adoption leave. Some workers may also have additional holiday rights set out in their employment contracts.

In certain circumstances, holiday rights and holiday pay rights can be carried over to the next holiday year. These include if they did not receive rolled-up holiday pay to which they were entitled, they were not given a reasonable opportunity to take their leave, or they were not told that unused leave could not be carried over.

Lost Holiday Pay? What To Do if Your Holiday Rights are Breached

Even if workers realise that they have lost holiday pay or their employer is not upholding their holiday rights, it may be difficult to address the issue. Some workers fear potential repercussions if they raise their concerns and others feel overloaded with work to take annual leave. However, understanding possible approaches may help workers feel more able to assert their rights.

Initially, workers may choose to raise the issue informally with their line manager or HR team. It may be that their employer was genuinely unaware of the problem, in which case this may be sufficient to resolve it. If this yields no results, workers can raise a formal grievance with their employer. Companies generally have their own grievance procedure which should be followed for this purpose.

Workers might find their employer’s grievance procedure in their employment contract, company handbook, HR manual, or on their company’s intranet. It should set out the process to be followed when raising and resolving a grievance, including submitting a grievance in writing, attending a meeting with the employer, and the ability to appeal the decision.

If workers are dissatisfied with the outcome of their grievance and appeal, they may choose to seek external help. Mediation, conciliation, and arbitration are three examples of third-party intervention to help resolve issues between employers and workers. Alternatively, workers may decide to bring a claim against their employer in the Employment Tribunal.

If you believe that have lost holiday pay or your rights have been breached, Redmans Solicitors can help. Contact our friendly team of employment law specialists today to arrange an initial consultation and discuss your options.

To begin, you can either: