Calculating Holiday Pay for Part-Time Workers
In Harpur Trust v Brazel, the Supreme Court had to decide on the correct method of calculating holiday entitlement and pay for workers who work for varying hours during only certain weeks of the year but who have a contract throughout that year. The issue was whether their entitlement should be calculated on the same principle as full-time employees or whether their leave should be calculated by ignoring those weeks.
While this case specifically relates to a term time working arrangement, it could also be relevant to zero-hour contracts or other atypical working arrangements in which a worker only works for part of the normal working year.
A part-time worker’s annual leave must be calculated as 5.6 weeks, in the same way as everyone else. Calculating holiday pay based on 12.07% of annual earnings is incorrect and should no longer be used.
Employers need to check if they have any atypical workers whose holiday pay is being calculated on the basis of 12.07% of pay multiplied by 5.6 weeks or via another method that results in them having a pro-rata entitlement. If so, they will need to change how they calculate their holiday pay.
Employers should review the arrangements of term time workers who work normal hours when they are at work and check that their holiday entitlement and pay are being calculated correctly.
The decision by the Supreme Court is likely to affect many employers in the education sector but will also be relevant to other organisations that have employees working on a term-time-only basis.
Managing public holiday entitlement for part-time workers
Employers must ensure that workers receive at least the statutory minimum annual leave entitlement. If an employer is paying full-time staff not to work a public holiday, then part-time staff should be entitled to a pro-rated holiday entitlement to avoid any claims of less favourable treatment.
Example
An employee works three days a week, Tuesday to Thursday. The employee should be given a pro-rata entitlement to public holidays as part of their annual leave entitlement but can take their annual leave when they choose since very few public holidays will fall on their working days.
Employers often prefer to calculate pro-rated annual leave and public holidays based on hours rather than days when looking at different working patterns.
Changes to Right to Work Checks
Right-to-work checks are an important part of employment law, but the ways in which they are conducted have changed in response to the pandemic.
The Current Situation
Under UK Law it is illegal to employ individuals who cannot prove they have the appropriate right-to-work documentation. Those who choose to recruit illegal workers face criminal convictions and can incur fines of up to £20’000 per employee. It is therefore crucial for employers to follow the necessary steps and to be able to show evidence that the correct steps have been taken.
What’s Next?
Since the pandemic, the government announced new ways of conducting right-to-work checks as face-to-face checks were no longer an option.
From April 6th, the status of all foreign nationals who hold either a biometric residence card, biometric residence permit, or frontier worker permit now needs to be checked online rather than manually. All that is needed is a date of birth and a share code to verify someone’s eligibility via the government’s online checking service.
From 1st October 2022, employers will be asked to use certified Identity Service Providers (IDSPs) to complete digital right-to-work checks for any British or Irish citizen holding a valid passport, as an alternative to undertaking the manual checks. Employers must submit digital images of personal documents, rather than copying original documentation.
These amendments will leave employers with a choice: return to the manual process, which is more time-consuming, or revert to digitally checking which will have cost implications for future budgets.
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Case Law: Harper Trust v Brazel
In the case of Harper Trust v Brazel, the Supreme Court has confirmed that workers who only work for part of the year, but on permanent contracts, are effectively entitled to the same holiday allowance as workers who work all year.
Background to the case
Mrs. Brazel brought a claim against her employer, Harpur Trust, in relation to holiday pay. Ms. Brazel was a visiting music teacher, employed on a permanent, zero-hours contract. She was paid for the work she did. Mrs. Brazel did not work a full week and she was not required to work during the school holidays.
She argued that as a worker, she was entitled to a full year’s paid leave (5.6 weeks) in accordance with the Working Time Regulations 1998 and not a pro-rated holiday based on the weeks she actually worked. She also argued that her holiday pay should be calculated based on her earnings in the previous 12-week reference period (now 52 weeks). The Trust- as many employers have done- was following ACAS’ guidance which suggested that employers use a multiplier of 12.07% to pro-rate holiday entitlement for part-year workers. Since the Supreme Court ruling, this ACAS guidance has been removed.
Supreme Court Decision
Where a part-year worker works on a permanent contract throughout the holiday year but has irregular hours and pay they are entitled to 5.6 weeks statutory leave and their holiday pay should be calculated, not on a pro-rata basis, but based on a ‘week’s pay’ averaged out over the previous 52 weeks.
The effect of the judgment is that Mrs. Brazel ad other similar workers who work atypical working patterns or who don’t work a full leave year will be paid proportionally more by way of holiday pay than those who work full-time or part-time.
Next Steps
Firstly, employers must assess the number of workers that could be impacted by this decision. Employers should also ensure that when calculating holiday pay, they use the correct calculation moving forward and make any amendments to workers’ contracts to reflect how holiday pay will be calculated moving forward. Employers may also consider in the future, whether a fixed-term or a temporary contract rather than a permanent one.
Employers may want to use this as an opportunity to review the working patterns they have in place and particularly how permanent contracts are used for employees working different patterns.
The Five Steps in Risk Assessment
The five steps in risk assessment are identifying hazards in the workplace, identifying who might be harmed by the hazards and taking reasonable steps to eliminate or reduce the risks, recording your findings, and reviewing and updating your risk assessment regularly.
1. Identifying hazards in your workplace
The first step in risk assessment is identifying hazards. You must identify things in your workplace which pose a risk to the health and safety of staff or visitors. Walk around your premises to consider what could potentially cause a hazard and consult with staff about what they think the risks are.
When performing a general risk assessment, you should look for risks such as:
Slip and trip hazards like deliveries not put away, loose flooring, spillages, etc.
- Electrical equipment
- Fire hazards
- Risks associated with manual handling or lifting
- Environmental issues, such as ventilation, temperature, or noise levels
- General maintenance risks, such as damaged or defective equipment, storage, cleaning supplies, or presence of vermin or pests
- Risks associated with workstations
- Working at height or objects falling from a height
- Risks caused by visitors to the workplace
- Lone working
You must keep an open mind to any risks specific to your industry and premises.
2. Identify who might be at risk
Secondly, you have to identify any particular group of staff whose health and safety is at risk due to the work they do. For example, warehouse workers might be particularly at risk of falls from height or things falling on them, whereas your office staff are more likely to be affected by poorly arranged workstations.
Additionally, sometimes a group of people will be at risk due to a shared characteristic, rather than the nature of their roles, e.g., pregnant women or young people. For example, if you employ any women of child-bearing age, the nature of the work could involve a particular risk to a new or expectant mother or her baby. These risks must be considered in the general risk assessment.
3. Taking steps to reduce or remove the risks
As part of your risk assessment, you must decide what to do about the hazards and risks you uncover, and take action to deal with them.
You must get rid of any hazards that you can and try to reduce the risks posed by any that you cannot remove.
Some suggestions on how to reduce or remove hazards in the workplace include:
- Changing the design or layout of your workplace
- Providing different or better work equipment, including any protective equipment
- Having better premises or a better equipment maintenance regime
- Providing better welfare facilities, e.g., rest breaks
4. Keeping written records
If you employ more than five people, you are legally required to keep written records of your risk assessments. If you have less than five employees, you do not have to write anything down, however, it is good practice to always keep a record of your risk assessments in writing so you can refer to them if needed.
5. Reviewing your risk assessment
As soon as you become an employer you should perform a general risk assessment. You are then legally required to review and renew your general risk assessment if it is no longer valid or if there have been changes to anything that is covered.
As business changes over time, you should regularly review and update your risk assessment. Annual reviews are common for most businesses.
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