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.
