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Consultation on holiday entitlement after Supreme Court ruling

The Government has launched a consultation on holiday entitlement this month, following the judgment of the Supreme Court in July 2022 in the case of the Harpur Trust v Brazel.

An anomaly has occurred as a result of the judgment. Part-year workers are now entitled to a greater holiday entitlement than part-time members of staff who work the same number of hours over the course of the year. The consultation is focused on addressing this disparity.

The Supreme Court case confirmed that holiday entitlement for permanent part-year workers on zero-hours contracts should not be pro-rata to that of a full-time worker.

Proportionate pay

Launching the consultation, which runs until 9 March, the Government says it wants to tackle any disparity by ensuring that holiday pay and entitlement received by workers is proportionate to the time they are working.

Part-year workers are entitled to 5.6 weeks of statutory annual leave calculated using a holiday entitlement reference period to determine their average weekly pay, ignoring any weeks in which they did not work.

Changes to current legislation are likely to affect those in the education sector who commonly use term-time contracts.

However, it could also pose new HR problems for employers with zero-hours, variable hours or agency staff.

Teaching assistants

The Government estimates that between 320,000 and 500,000 permanent term-time and zero-hours contract workers will receive more holiday entitlement.

Approximately 37 per cent of these are workers in the education sector, such as teaching assistants who are employed on part-year contracts.

This case concerned the calculation of holiday pay and entitlement of a permanent part-year worker, in this case, a music school teacher. As part of a zero-hours part-year contract, she worked at a school on a regular basis and was only paid for the work she carried out.

Government proposal

The Department for Business, Energy & Industrial Strategy (BEIS) proposes the introduction of a holiday entitlement reference period for part-year and irregular hours workers, to ensure that their holiday pay and entitlement are directly proportionate to the time they spend working.

This will involve calculating hours worked in the previous 52 weeks and multiplying them by 12.07 per cent to find a part-year worker’s annual statutory entitlement in hours.

Need advice on holiday entitlement and legal employment matters? Contact us today.

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