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Working Time Regulations: Holiday pay entitlement for part year workers

Written by Mark Radford

The Working Time Regulations (the Regulations) require that full time employees are given a minimum of 5.6 weeks paid holiday a year. This may include bank holidays.

The Regulations allow for this to be pro-rated for part time employees:

  • If full time working hours are 40 hours per week and an employee works for 20 hours per week, the employee is entitled to 2.8 weeks paid holiday.
  • This may include the bank holidays that he or she is entitled to take.

Harpur Trust v Brazel

In the recent case of Harpur Trust v Brazel, the Court of Appeal has decided that where a full time employee (who is employed throughout the year, such as a term time only employee or an employee on a zero hours’ contract) is only contracted to work for part of the year, the employer cannot simply pro-rata the entitlement to paid annual leave on the same basis.

The Court decided that a part year worker’s entitlement to paid holiday is based upon the hours worked during the part of the year which the employee works, and not the full year.

The Education Sector

The most common sector in which employees are employed for the whole year, but only required to work part of the year is the educational sector.

In the education sector it would usually be easy for the employer to show that they have delivered the required amount of annual leave, as school or college holidays will normally account for more than the 5.6 weeks leave required by the Regulations.

The Decision

The Court’s decision raises an issue for employees who are paid ‘rolled up’ holiday pay during the weeks worked, rather than those receiving an annual salary paid on a monthly basis. Rolled up holiday pay is often calculated at the rate of 12.07% of the worker’s pay (spreading the holiday across the whole year).

The Court’s decision in Harper Trust means that for a full-time, part year worker, the calculation rate will need to be higher. This is because effectively the full-time equivalent holiday pay needs to be paid to the employee during the weeks that are actually worked.

Fortunately, it is still possible, where the part year employee is also a part time employee to pro-rata both the annual leave entitlement under the Regulations and the full-time salary to reflect the part time (but not the part year) status.

If you require any guidance at all regarding this area, including guidance on the Working Time Regulations, please do not hesitate to contact our Dispute Resolution and Employment team.

Contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute professional or legal advice. Invicta Law cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.

 

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