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The Government is consulting on changes to how holiday is worked out for term-time and zero hours workers following an earlier Supreme Court ruling.
The Government is consulting on the calculation of holiday entitlement for people who work part of the year, for instance, term time workers, or who work irregular hours such as zero hours workers, following a Supreme Court judgement last year.
The Harpur Trust v Brazel ruling in July confirmed that employees who only work for part of the year, but permanently, are entitled to the same holiday allowance as those who work throughout the year. Under the Working Time Regulations, employees are entitled to 5.6 weeks’ paid annual leave and this case confirms that this should apply regardless of how many weeks a year a person works.
In the consultation the Government says it proposes to introduce a holiday entitlement reference period for part-year and irregular hours workers to ensure that their holiday pay and entitlement is directly proportionate to the time they spend working.
It is also interested in understanding how holiday entitlement is currently calculated for agency workers and how the consultation proposal might be implemented.
Kate Palmer, HR Advice and Consultancy Director at Peninsula, said: “Launching this consultation shows that the Government recognises that the way in which the law is written creates unintended anomalies that need to be rectified.
“The fact that the consultation period is only open for eight weeks suggests they are putting a high priority on resolving the issue quickly and introducing amendments.
“The Government proposes legalising the 12.07% method, to ensure that leave entitlement is proportionate to working hours, as well as using a 52-week reference period, including non-working weeks, to calculate leave entitlement.
“Effectively this could see part-year workers treated comparably to part-time workers in their annual leave entitlement.
“Under current laws, part-year workers can receive considerably more leave and pay than that of a part-time worker despite working the same number of hours in total over the course of a year.”
She added: “Any changes to current legislation will be particularly important for those in the education sector who commonly use term-time contracts. However, it could also pose a new HR headache for any employer who has zero-hours, variable-hours, or agency staff.
“Changing the law can be a lengthy process, but employers should continue to calculate and provide leave in line with the ruling in the Harpur Trust v Brazel case until we know the outcome of this consultation.”
This consultation closes at 11:45pm on 9th March.