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Employment

Holiday Pay and Permanent Part Year Workers

Wednesday, October 9, 2019

Case: Brazel v The Harpur Trust

In the above case the Court of Appeal recently ruled that the Working Time Regulation (WTR) approach to holiday pay, for permanent workers who only work part of the year, should be adopted and their leave allowance should not simply be pro-rated.

The specifics of this case involved a Claimant who is a music teacher working purely within school term time. The holiday entitlement required the teacher to book her leave outside term time. She was paid accrued holiday pay on three occasions each year coinciding with the end of each term.

The method used by the employer, the Harpur Trust, is one often used in such circumstances notably involving casual workers and resulted in taking a calculation of 12.07% of the hours she worked. Whilst this is often used it is not a method of calculation followed by the Working Time Regulations 1998 (WTR).

The dispute centred on the calculation method used with the Claimant making a case for her holiday pay being miscalculated. Instead of applying 12.07% the Trust should use the WTR approach of an average of the 12-week period immediately preceding the holiday.

The initial Employment Tribunal ruled in favour of the Employer, The Employment Appeal Tribunal then overturned the decision and stated that in circumstances where an employee is on a permanent contract but only works part of the year, they are still entitled to 5.6 weeks of holiday. The EAT view was that this calculation should use the average of the 12-week period immediately before the holiday. Using this calculation (rather than the alternative employer’s proposal) gave the Claimant a greater amount of holiday entitlement and, in turn, pay.

Unhappy with the EAT finding the Trust appealed stating that they did not consider it to be equitable, noting such an approach would result in the Claimant receiving a higher proportion of her annual salary as holiday than a full-time worker.

The Court of Appeal rejected the appeal against the EAT’s decision.

Whilst this outcome may be a surprise to many employers it confirms the importance of complying with WTR guidelines and making sure the calculations comply. You must still get 5.6 weeks’ paid holiday as a minimum if you work irregular hours, such as:

  • shifts
  • term-time work
  • zero-hours contract

Holiday Pay Information for Employers

Statutory annual leave entitlement
Most workers who work a 5-day week must receive at least 28 days’ paid annual leave a year. This is the equivalent of 5.6 weeks of holiday.

Working part-time
Part-time workers are entitled to at least 5.6 weeks’ paid holiday, but this will amount to fewer than 28 days. For example, if they work 3 days a week, they must get at least 16.8 days’ leave a year (3 × 5.6).

Irregular hours
People working irregular hours (like shift workers or term-time workers) are entitled to paid time off for every hour they work.

Limits on statutory leave
Statutory paid holiday entitlement is limited to 28 days. For example, staff working 6 days a week are only entitled to 28 days’ paid holiday.

Bank holidays
Bank or public holidays do not have to be given as paid leave. An employer can choose to include bank holidays as part of a worker’s statutory annual leave.

Extra leave
An employer can choose to offer more leave than the legal minimum. They do not have to apply all the rules that apply to statutory leave to the extra leave. For example, a worker might need to be employed for a certain amount of time before they become entitled to it.

Other aspects of holiday entitlement

Workers have the right to:

  • get paid for leave
  • build up (‘accrue’) holiday entitlement during maternity, paternity and adoption leave
  • build up holiday entitlement while off work sick
  • request holiday at the same time as sick leave

Disputes

Paid annual leave is a legal right that an employer must provide.

If you have any queries or concerns relating to holiday pay or any related HR matter please contact us… Call Robert Gibson or Sally Lomas Fletcher on 0191 2328451 or e-mail sallyfletcher@samuelphillips.co.uk

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