Part-Year Workers Holiday Pay: Understanding the Changes
In a recent ruling by the Supreme Court, it has been decided that employees who are on permanent contracts, but who only work for part of the year, such as term-time workers or people on zero-hours contracts, are entitled to the same holiday pay as their colleagues who work all year. Those who work all year are entitled to 5.6 weeks’ holiday a year. The ruling stipulates that their annual leave entitlement can no longer be pro-rata’d based on the number of weeks in a year where they are not required to work.
Understanding the Holiday Pay Changes in Context
The case which propelled these rulings involved a music teacher who worked term time and believed that her holiday pay should be calculated using her average earnings and not pro-rata’d. The case outlined how she had lost out because of the way in which the school calculated her holiday pay by calculating her earnings at the end of each term and applying a blanket 12.07% of her earnings as holiday pay which has been the same method used to calculate casual workers’ holiday pay by many organisations.
But the Employment Appeal Tribunal said that a part-time or term-time worker’s holiday pay should be calculated using their average earnings over a 12-week period (which has subsequently changed to 52 weeks) and that they are entitled to a minimum of 5.6 weeks’ holiday a year. They also confirmed that annual leave entitlement cannot be pro-rata’d on account of the weeks the worker is not required to work.
To read more about the case, click here
What Do These Changes Mean in Practice?
If you’re unsure about what this means to your business and whether it impacts any of your employees or workers, contact Danton for further information.
Which Workers are Covered by the Holiday Pay Ruling?
The Supreme Court Ruling (for The Harpur Trust v Brazel) covers workers who are employed, on permanent year-round contracts, but who are only required to work for part of the year. This could include:
Term-time only workers
Permanent seasonal workers
Workers engaged on permanent zero-hour contracts
How Many Days Statutory Holiday Pay Are Part-Year Workers Entitled To?
Part-year workers are entitled to 5.6 weeks statutory holiday, but this does not necessarily equate to 28 days’ holiday. The correct number of days holiday will depend on their regular working pattern.
Further Guidance for Businesses
Our experienced team is available to offer advice and guidance to employers and business owners, including reviewing contracts to mitigate the potential impact of additional costs for the increased holiday entitlement. We can support you with advice tailored to your unique situation and offer solutions on a case-by-case basis. We offer a free 30 minute, no obligation call to discuss options. Call now: 01527 306 760