The consultation followed a recent Supreme Court ruling specifying how holiday entitlement should be calculated for such workers, which has created various difficulties and anomalies in practice.
The case ruled that holiday for part-year workers and those with irregular hours was to be calculated by looking at hours worked over a rolling 52-week period - but only counting weeks in which the worker actually worked, up to a maximum of 104 weeks. It also stopped the practice of employers using a percentage – usually 12.07 per cent - to calculate holiday entitlement.
This meant that entitlement in a current holiday period could bear little relation to the hours worked in that period, as many of the weeks included in the 52-week period could in some cases be from previous holiday years.
It also meant it could be difficult to work out in advance the holiday a worker was entitled to; entitlement could vary depending on when the holiday is taken; and part-year workers could sometimes be entitled to proportionately more holiday than a full- or part-time worker working the same hours.
The proposals include simplifying the current calculation so that part-year and irregular workers are entitled to holiday calculated pro rata to the proportion of the holiday year actually worked. This would give them the same holiday as part-time workers working the same hours.
The calculation would be based on hours worked in the 52-week period before the start of the relevant holiday year, counting all weeks and not just those actually worked. That would mean the entitlement could be calculated at the beginning of the holiday period.
One issue is that the new rules would enable employers to reduce holiday entitlement by giving a worker, say, one hour’s work in a week, so that the week counted towards the holiday entitlement and reduced their total holiday entitlement. Nevertheless, the government takes the view that the new rules would still be fairer and simpler.
Special rules are proposed for the first and last years of employment.
It is not proposed to change the rules for calculating holiday pay.
Operative date
- Now
Recommendation
- Employers should check out the proposals in the consultation on the GOV.UK website.
This article from Atom Content Marketing is for general guidance only, for businesses in the United Kingdom governed by the laws of England. Atom Content Marketing, expert contributors and ICAEW (as distributor) disclaim all liability for any errors or omissions.
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