21 October 2022
Harpur Trust v Brazel: Court case regarding holiday entitlement and pay
There has been a recent court case (Harpur Trust v Brazel) regarding holiday entitlement and pay. Whilst the case specifically related to a term-time worker, the implications of the case covers all seasonal, ad-hoc and zero-hours workers.
The court have ruled that all workers are entitled to 5.6 weeks of holiday each year regardless of whether or not they work the whole year or only part of the year (I.e. someone who is employed for the whole year but only works part of it).
Many employers have been calculating holiday pay for zero-hours staff as 12.07% of the hours that they actually work. The court have ruled that this is wrong as it means that casual staff get less holiday than 5.6 weeks annually.
The court have said that the amount of paid leave that a worker is entitled to relates to the amount of time they are employed by the employer rather than the number of hours they actually work. So, even if a worker on a permanent contract only actually works one week of the year they are still entitled to 5.6 weeks holiday.
This court ruling leaves a lot of questions unanswered and we will update our information when there are further court decisions on the issue of holiday pay for casual workers.
At the moment the advice is not to set out the method of calculating holiday pay in a zero hours contract. It should simply state that they are entitled to 5.6 weeks holiday each year and this is pro rata for part time staff.
The actual calculation of holiday pay is a payroll issue. There is however some current government guidance which can be found using the following links:
How to calculate holiday entitlement for workers on different types of contract: https://www.gov.uk/government/publications/calculating-holiday-entitlement-for-workers/how-to-calculate-holiday-entitlement-for-workers-on-different-types-of-contract
Calculating holiday pay for workers without fixed hours or pay: https://www.gov.uk/government/publications/calculating-holiday-pay-for-workers-without-fixed-hours-or-pay/calculating-holiday-pay-for-workers-without-fixed-hours-or-pay--2
Whilst there is no specific deadline to update existing employment contracts, we recommend businesses review existing contracts if you have seasonal, ad-hoc and zero-hours workers.
For more information and advice, please speak to Worknest by clicking here.
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