An employer underpaid wages and holiday pay to their employee during furlough

In the case of Ulloa v Pridegreen Limited, the London Central Employment Tribunal had to decide if the employee, Ms Ulloa was underpaid wages and holiday pay whilst on furlough.

The Facts

Ms Ulloa was employed by Pridegreen Limited as a Chambermaid at the London Elizabeth Hotel in Hyde Park and had been employed since April 2011.

As a result of the covid pandemic and lockdown restrictions Ms Ulloa was placed on furlough by her employer and issued with a letter on the 13^th April 2020 stating that she was not required to work and would receive 80% of her pay, in line with the furlough scheme.

Ms Ulloa’s gross pay in January and February 2020 was £1,144 per month. Despite the promise of paying 80% of her pay she was only actually paid £490.28 per month by the employer between March 2020 – January 2021.

In June 2020 Ms Ulloa raised the issue of the shortfall in her pay but this was not resolved and so she made a claim to the Employment Tribunal in August 2020.

At the Employment Tribunal hearing the employer accepted that they had not correctly calculated Ms Ullua’s furlough pay. It appears from the detail contained in the Judgement that they calculated her furlough pay as 80% of pay for March 2020.

The employer also sought to assert the argument that they could not amend their claim with HMRC to claim the correct amount of furlough pay as the old scheme had closed. It therefore appears that they were in fact paying Ms Ulloa what they believed they had been able to claim from the scheme.

The Employment Tribunal decision

The Employment Tribunal stated that their role was to decide what was owed by the employer to the employee and not to make a decision based on what the employer could afford to pay or could recover from the furlough scheme.

With regards to holiday pay and entitlement the Tribunal concluded that Ms Ulloa was entitled to 100% pay for days worked in March 2020 and days taken as annual leave. They also calculated and concluded Ms Ulloa’s outstanding untaken holiday entitlement for 2020 which was to roll over to 2021.

Ms Ulloa remained an employee of Pridegreen Limited so would not receive payment for the accrued remaining holiday unless she took the holiday or on termination of employment.

The Employer was ordered to pay Ms Ulloa £4,767.65 unlawful deductions from wages.

Points to note

The decision of the Employment Tribunal in respect of Ms Ulloa’s claim for underpaid wages emphasises what I have been stating throughout the pandemic and furlough scheme, which is, what an employer is legally required to pay an employee is different and distinct from what an employer can claim from the government under the job retention scheme.

It is unfortunate for the employer in this case that they did not seek advice about their claim under the scheme or listen to Ms Ulloa when she raised her concerns with them in June 2020. Had they listened and taken her requests seriously they could have corrected their claim and saved themselves money and hassle of defending an Employment Tribunal claim.

The decision also confirms that holiday pay should be paid at the full rate, i.e. 100% of pay, which was a matter under discussion at the start of the furlough scheme, but subsequently confirmed.

Ulloa v Pridegreen Limited – You can read the full judgement HERE