Entitlement To Holiday Pay and AWR

[PayMatters]

In respect of AWR yes this does relate to contractors working through an umbrella company unless you are working through a Swedish derogation type contract.

[LisaContractorUmbrella]

Most umbrella companies class part of your weekly pay each time you're paid as holiday pay so in effect you have been paid it already and normally won't be paid anything if you're not working. If you look at a normal payslip you will see if part of your pay is described as holiday pay.

"Rolled-up holiday pay ‘unlawful’

05/04/2006
A decision was at last made on 16 March 2006 by the European Court of Justice about the long outstanding issue of rolling-up holiday pay – i.e. where an employer pays employees an additional sum for holiday within their hourly wages.

Previously, the Advocate General had decided that this could be done provided that the employer was genuinely increasing the rate of pay by an additional amount for holiday pay. Generally the ECJ follows the Advocate General’s opinion, but unusually in this case it disagreed.

The ECJ has ruled that rolled-up holiday pay is, prima facie, unlawful, which will be initially concerning for many employers who currently follow this practice. Indeed, the TUC have released an article welcoming the ruling and stating that it effectively puts an end to the practice of paying rolled-up holiday pay"

[LisaContractorUmbrella]

In respect of AWR yes this does relate to contractors working through an umbrella company unless you are working through a Swedish derogation type contract.

Why wouldn't it apply under Swedish Derogation?