Search Magnifying Glass

Contractor Holiday Pay?

Q. I am currently a self employed contractor (limited company) for one of the large banks, via a contracting agency. The bank has advised that all staff including contractors must take 2 weeks time off during the year for their ‘wellbeing’. For permanent staff this is a paid holiday – for contractors it is not. So we are suddenly faced with a shortfall of 10 day rates. Is this legal? Will it affect my status with HMRC if I am in effect being treated as a permanent member of staff?

A. This a contractual matter rather than one of employment status.

If your contract states the contract can be suspended for holiday periods you will be not be provided work for these periods.

This will normally cover national holidays like Easter, Christmas and New Year’s when the majority of company’s do not operate.

If your contract does not have such a provision you will not be obliged to take the time off. If it is enforced on you, you will be able to argue a breach of contract.

Contractors should bare in mind the risk that a refusal to be flexible could result in their contract being terminated with the agreed contractual notice served on them.

Before signing a contract please read it carefully to avoid any conflicts arising. Where a dispute arises speak to your Agency and see if they can resolve the matter for you by mediation.

This answer was provided by Quest.

By Contractor Doctor


Add a comment

10 thoughts on “Contractor Holiday Pay?”

  1. Warren Ayling

    Regardless of what is in your contract, you have an obligation to yourself, you friends and family and t I those you provide services too to take regular breaks.

    The question doesn’t read as though the person is being coerced to take two consecutive weeks at a given period (e.g.over Xmas).

    Any good employer should promote health and well-being to all staff (employees and contractors alike).

  2. Christopher Brian Ralphs

    This is fairly common in this business area: Banks/financial services companies often require that you are locked out of key systems for two consecutive weeks for compliance and policy requirements – this would then double the number of people required to commit fraud in properly controlled systems. “Block-Leave”/”SOX leave”, as it often known, is sometimes restricted only to people who have access to key systems, but often it is applied to all staff and contractors, regardless of roles or access. I’ve had it applied to me as staff and a contractor – with the latter usually being applied as a gap between contracts.

  3. N A R

    I’ve worked in some of the largest cities in banks in Europe as both a perm and a contractor. Every bank has the 2 weeks furlough in the contract. As explained above its a SOX/Fraud leave to establish that there is no fraud being undertaken on your part.

    This used to happen for sure during Xmas previously but now Banks are being a bit more flexible as to when that happens.

  4. Raif

    “Contractors should bare in mind the risk that a refusal to be flexible.” This should be corrected to: bear in mind

  5. James

    ‘Well being’ is being used as an excuse at most of these institutions. It was introduced for the first time at my main client’s site last year, and it was purely a cost-cutting exercise – which I know for a fact from someone involved in the decision. They calculated that they could shave x percent off the IT budget by not paying all the contractors for 2 full weeks. That budget saving came directly from the contractors pockets in lost earnings at one of the most expensive times of the year. The company gambled that there’s not much hiring going on at that time and that people couldn’t or wouldn’t leave because of it. A cycnical exercise from start to finish.

  6. Paddy

    “Speak to your agency…” ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha

  7. Paddy

    “Speak to your agency…” ha ha ha ha

  8. Paddy

    Apologies – first message was rejected as spam but still got posted. Tsk tsk too much jollity

  9. Michael

    “They calculated that they could shave x percent off the IT budget by not paying all the contractors for 2 full weeks”

    How? You say that the permanent staff were on holiday as well. So if anything it is an additional cost to the business if staff are not behind their desks? Furthermore, the work still needs to be done.

Leave a Reply

Your email address will not be published. Required fields are marked *