If you thought working out holiday pay for standard working patterns was complicated, you’ll no doubt find calculating holiday pay for part time and a-typical working arrangements extremely frustrating and complex. To add to the complexity, a new supreme court ruling has seemingly moved the goalposts again and complicated it further!
So what does this mean for us?
The new ruling effectively changes the law and introduces a new term that we have not used previously called ‘Part-Year’ working. This term covers those who work term time only.
This case and ruling has sought to clarify what is lawful and what is unlawful when calculating holiday pay for those who work under a permanent continuing contract but only requires them to work ‘part of the year’. This ruling has confirmed that those who work under this kind of contract are entitled to 5.6 weeks statutory holiday pay.
What next?
If you engage part-year workers or workers who work under a zero hours contract of employment, further information will be released in due course to help you understand how it directly affects your workers.
In practice, you will need to change the wording of the holiday pay clause on your contact of employment template going forward and also need to advise existing staff that this clause is changing. You will then of course need to change how you calculate holiday pay in practice and implement this change as soon as you can.
The first thing you will need to consider is changing the wording of any template contracts that reference 12.07% or those for part-year workers. This will include any zero hour contract templates. The next consideration is how you engage with workers who are deemed to be part-year workers. The easiest way to manage this is to issue fixed term contracts rather than zero hour contracts. That will allow you to calculate the amount of holiday entitlement that the employees will accrue during their fixed term employment based on how many days a week they work and how long the contract will last for.
