What’s the background?
In July, the Supreme Court handed down a judgement that ruled a worker with an irregular working pattern was entitled to 5.6 weeks of paid annual leave. She was a music teacher with a continuing contract, but she only worked certain weeks of the year.
5.6 weeks is the minimum stipulated by the UK’s Working Time Regulations. However, her employer argued that she was not entitled to the same amount of holiday afforded to workers that worked the whole year. They argued that her leave entitlement should be calculated proportionally so the weeks she didn’t work reduced her paid annual leave.
What are the implications for employers?
This could have implications for seasonal workers, those on zero-hour contracts, and part-year workers.
If you think this could affect you, we advise:
- Check your calculations for holiday pay for part-year, permanent, and irregular hour workers to ensure they are correct.
- If changes need to be made, then these should be reviewed and changes made to contracts and payroll processes.
- You may want to consider whether these workers should be placed on permanent contracts.
- Employers are still able to determine when the holiday is taken and use the hourly rate of pay when calculating holiday. Those with variable rates will have to ensure that the hourly rate is calculated correctly.
- If you decide to continue using the percentage method calculation be aware of the claim risk which could go back to the past two years.
- Employers should be mindful of colleagues who may resent seasonal workers receiving the full 5.6 weeks of holiday and this may have to be managed sensitively.
The government has updated its guidance on how to calculate holiday pay for workers without fixed hours or pay in light of the case.
Get in touch if you would like assistance with holiday calculations and we can advise.
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