You Better Get This Part-year Started.

You work part-time, so you accrue holiday in proportion to your working hours.  Right? A full-time worker is entitled to 5.6 weeks’ holiday, so a part-time worker gets a proportion of that.  It’s always been that way, hasn’t it? And for administrative convenience, many employers have paid a worker with no normal working hours for holiday accruing at a rate of 12.07% of time worked (based on 5.6 weeks’ holiday as a proportion of 46.4 weeks’ worked).

EU case law has established through a number of cases that minimum statutory leave accrues under the Working Time Directive in proportion to actual work done (the “accrual approach”).  There’s a separate issue regarding how much to pay for that accrued holiday, but that’s an article (or series of articles) for another day.

However, in the case of Harpur Trust v Brazel, the EAT and now the Court of Appeal have held that the UK’s Working Time Regulations 1998 actually provide for a more favourable accrual rate of holiday than that required under the EU Directive.  It’s quite straightforward really – every worker is entitled to 5.6 weeks’ holiday with each week’s pay calculated as an average of the previous 12 weeks before the first day’s leave (ignoring any week in which no remuneration was due).  That’s what section 224 of the Employment Rights Act 1996 states and it says nothing about pro-rating the holiday.

Putting all this together meant that Mrs Brazel, a music teacher on a permanent zero-hours contract who did not work during school holidays and was only paid for the hours she worked, was also entitled to be paid for 5.6 weeks’ holiday based on her average weekly pay while working during term-time with no reduction for the fact that she worked only part of the year.  This equated to 17.5% of her annual earnings, rather than the 12.07% paid by her employer.

The law requires part-time workers to be treated no less favourably than full-time workers (with the pro-rata principle applying where relevant), but the law didn’t stop Mrs Brazel, as a permanent part-year employee, from being treated more favourably than a full-year employee where section 224 applied. 

The Court of Appeal made it clear that its judgment related only to those workers on permanent part-year contracts, rather than those simply working part-time throughout the year.  However, the floodgates may have been pushed slightly ajar and further cases covering alternative part-time scenarios are likely to start making their way through the employment tribunal system.

In the meantime, employers of part-year staff with no normal working hours should analyse their potential liabilities from a contingency standpoint.  That said, going forward and until the law is clarified further, many employers may well decide to continue their administratively convenient practice of the 12.07% approach to calculating holiday entitlement.

The contents of this article are intended as guidance for readers. It can be no substitute for specific advice. Consequently we cannot accept responsibility for this information, errors or matters affected by subsequent changes in the law, or the content of any website referred to in this article. © Mundays LLP

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