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A Supreme Court decision taken last month means UK’s part-year workers are now entitled to receive full paid annual leave, which equates to 5.6 weeks’ annual holiday.

Essentially the ruling found an employee’s holiday entitlement should not be affected by how many weeks they actually work in a year. This is because an employment contract is in place for the whole year.

As a result, you may need to change the way you calculate leave entitlement for these workers, plus you will have to update your HR procedure or staff contracts, or you could be at risk for unlawful deduction of wages.

How does this work

If a member of staff works on a casual basis or very irregular hours, it’s often easiest to calculate holiday entitlement that accrues as hours are worked. A teacher, for example, who only works on term-time contracts would have previously had their holiday pro-rated. However, the recent ruling means that even if one of your employees only works one month of the year, you will still need to give them the equivalent of 5-6 weeks’ paid leave.

Will this affect my workers?

This change doesn’t automatically mean every employee receives the same number of days off. A full-time employee will still receive 28 days’ leave because that’s the number of working days in 5.6 weeks.

This change only affects workers who work for part of the year on continuous contracts. Casual, seasonal, agency, variable hour and zero-hours employees who are employed for less than 12 months for short, fixed periods will not be impacted. They’ll still be entitled to holiday based on how many hours they have worked.

What’s the calculation?

Many HR professionals will have previously used the ‘12.07% method’ to calculate staff holiday leave and pay. That’s because the statutory holiday entitlement of 5.6 weeks is equal to 12.07% of the total hours worked in a year. So, to calculate holiday leave previously, you might have multiplied 12.07% by the hours, days, or weeks your employee worked. But going forwards, your calculation must change. If a member of your team works 3 days a week, they will be entitled to 16.8 days’ paid holidays per year – 3 days x 5.6.

Plus, if you give your full-time employees more than the statutory annual leave (for example, 6 or even 7 weeks), then part-time employees must get the same.

What to do right now!

  • Review and update all relevant policies
  • Update terms and conditions of all part-time staff
  • Provide them with a written statement that communicates their new entitlement
  • Amend current methods of calculating holiday entitlement
  • Pay in line with the ruling
  • Compensate part-time staff for holidays where you may have underpaid them

How can we help?

If you need specialist HR assistance to review and update your HR policies and practices, get in touch – 01327 317537 or caroline.robertson@actifhr.co.uk. We can provide the necessary help, support and non-obligatory advice, so you can avoid tribunal claims or pressure from unions.