Some employees and workers have contracts that cover the whole holiday year, but they are only required to work part of the year. For example, someone who has a zero hours contract may end up working and be paid for just a few weeks over the year, or someone may be engaged long term in a Christian school to work during term times only.
The Supreme Court has now confirmed that these “part year” employees and workers should still receive the full statutory holiday entitlement (5.6 weeks) for each full holiday year.
For administrative ease, the calculation of holiday entitlement for employees/workers whose hours varied was often based on 12.07% of the hours worked in that holiday year. However, this approach was not strictly within the letter of the law and could be problematic, as it could result in the employee receiving less than their statutory entitlement, in particular where there are unpaid non-working weeks during the life of the contract (e.g. someone working term-time only within Christian education).
Our understanding of the current position
Our understanding of the current position, following the Supreme Court clarification is:
Someone who is employed for the full holiday year (52 weeks) but who only works in term time (say 40 weeks) should not get 40/52 of the holiday a full-time employee would get, if this takes them below 5.6 weeks paid holiday. Instead, it should be “collared” so it does not fall below 5.6 weeks’ pay. The same principle would apply to someone on a zero hours contract that covers a whole holiday year, but who only works and gets paid for some weeks of the year.
This means, in theory, that someone who is employed for a full holiday year (52) weeks, but whose contract only requires them to do 1 week’s paid work, will still get 5.6 weeks paid holiday!
The pay the part-year employee should get when taking holiday should legally be based upon their average pay over the last 52 weeks they were paid for (which includes weeks of receiving sickness pay or holiday pay) or, if shorter, the period of their employment. You need to omit unpaid weeks from the calculation but do not go back further than 104 weeks. For example, for someone regularly paid 20 weeks a year, over a 5 year continuous contract, the calculation would be based upon their average pay for the 40 weeks they were paid for over the preceding 104 week period.
The decision only affects some part-time staff.
Where someone is a part year employee, but their pay is annualised (e.g. they are paid equally over the year, 1/12 of their annual pay each month) it will not have an impact in practice.
Where someone is part time but works regular hours over the year it will also not have an impact in practice.
We’re here to help
We recognise that Christian organisations will want to ensure they are meeting their legal obligations and properly honouring their staff.
Holiday pay calculations are not always straightforward, as the above analysis demonstrates. But please don’t struggle alone – we are here to help.
For any queries on this topic, please contact us, and we will be glad to assist your ministry.
This information has been provided by solicitors working for Edward Connor Solicitors. It is designed for the purpose of knowledge sharing only and does not constitute legal advice.
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