Holiday Pay for Part Year Workers…
Many organisations calculate holiday pay for part-year workers as 12.07% of their earnings during working time. However a recent ruling at the Supreme Court (Harpur Trust v Brazel) has confirmed changes to the way holiday pay is calculated for part-year workers. This ruling means that holiday pay for those working atypical hours should be calculated based on the average hours worked over the previous 52 weeks, ignoring any weeks without earnings.
Part-year workers are those who are employed throughout the year but only work for a portion of the year. Examples include: term-time workers such as teachers and support staff, who traditionally work between 36-39 weeks of the year; or zero-hour workers engaged on a permanent or ongoing basis.
What does this mean for you?
In short, part-year workers are entitled to 5.6 weeks of holiday per year, regardless of whether or not they are full time. Holiday pay is to be calculated based on average earnings over the previous 52 weeks rather than based on hours worked. Your holiday policies and calculation practices will need to be reviewed and may need updating, to ensure compliance following the decision in this case.
It may be possible to change working practices to reduce the impact of this ruling on your organisation and to mitigate additional costs, including but not limited to fixed-term contracts for a part-year term or only for busy periods. A variety of implications are connected with fixed-term contracts, with potential consequences for non-renewal, and it is therefore recommended that you take legal advice before engaging a fixed-term contract.
How can we help?
This decision will not only impact traditional term-time roles, but will also affect permanent and annual contracts with zero-hour workers who do not work each week.
We can review your employment contracts and holiday policies to ensure compliance with the latest case law and explain how the ruling might impact your organisation. We can advise you on the practicality and application of fixed-term contracts or other ways to mitigate the increased burden of costs, including any associated risks. to find out more… talk to Tollers, our experienced Employment Law and HR team are here for you.