The Supreme Court ruled last month that employees that work for part of the year are allowed the same holiday entitlement as those that work all year which has implications on how holiday calculations are made but what does it mean for your business?
The case revolved around Brazel, a music teacher who was employed on a term time only contract. Brazel bought a claim for unlawful deduction of wages and argued that the method used to calculate her holiday pay on a pro-rata basis was in breach of Working Time Regulations 1998 and the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000. This was due to a change in the way Harper Trust calculated Brazel’s holiday entitlement and resulted in a lower entitlement than previously paid.
The initial decision sided with Harpur Trust, however this was overturned in the court of appeal and has now been upheld in the Supreme Court.
The Supreme Court upheld the Court of Appeal’s decision that employees that work part of the year should be entitled to the same holiday as those that work all year.
This decision creates large implications for businesses who employ workers on a permanent or continuous contract for part of the year if they work irregular hours e.g zero hours, seasonal workers or term time workers as employers will no longer be able to use the percentage calculation method (12.07% of hours worked to calculated the holiday pay for variable hours worked.
This ruling means that the amount of leave to which a part-year worker under a permanent contract is entitled, is not required by EU law, and under domestic law is not, to be prorated to that of a full-time worker.
What does this mean for my business?
To a lot of businesses this ruling seems nonsensical as it means that a part year worker is entitled to the same annual leave and pay as a full year worker. This can now only be changed through legislation and there are no further routes to appeal.
In summary, part-year workers will be entitled to a minimum of 5.6 weeks of annual leave, and their holiday pay will be calculated using the average of the preceding 52 weeks’ pay.
This may still seem confusing so If you need support and advice on how these changes may affect your employees’ book in a meeting to see how Minerva HR Consulting can help. https://go.oncehub.com/SallyBrandon
You can read the full judgment here: https://www.supremecourt.uk/cases/uksc-2019-0209.html