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I am currently inquiring about holiday entitlement for myself and co workers. Our contract states that we get normal public holidays that are observed by the company [11 days] plus 25 days annual pro rata’d for part-time workers. We are basically on a zero hours contract – some weeks we could work five days a week and work 40 hours while others we could work 20 hours and some weeks it could just be a couple of days. We receive retainer pay if we work less than seven hours a week. For years we have only received 25 days holiday with 10 having to be taken at Xmas. I queried this last year and the company told us because our hours are so erratic it’s easiest to just give us a full entitlement of 36 days, including the public holidays. We were happy with this, but this year the person who granted these holidays has moved away from the company and now our holidays may change. Can you advise me on how many holidays we should actually get? Our holidays can’t be given in hours as we are never given set hours to work on any given day. We just work until we finish. We generally work Monday-Friday but occasionally work weekends which may become more frequent. We also only find out on a Friday what we are working the following week, which also could change in that week. I hope I have explained my circumstances well enough for you to understand. I would appreciate any advice you can give me.
Annual holiday entitlement and accrual rate are particularly problematic for casual workers where it is not known how many hours per week they will work.
Essentially, all workers qualify for 5.6 weeks’ paid holiday under the Working Time Regulations 1998 (WTR), regardless of their length of service. It is the definition of “a week’s leave” that causes much difficulty when casual workers work a different number of days and hours in each week making it difficult to determine exactly what a week’s holiday looks like. Unfortunately, WTR contains no mechanism for working out the length of a working week with reference to actual hours worked or any indication that this is necessary. Indeed, this would create difficulties in practice, as it would require the worker’s holiday entitlement to be calculated retrospectively, some sort of process for which the worker should account for the excess holiday taken, which regulations do not provide for. In the circumstances, therefore, because of the lack of domestic case law in this area and the lack of clarity in WTR there are many employers that have adopted various methods of calculating entitlements, which may or may not be correct.
Typically, many employers use an accrual rate of 12.07% of hours worked to calculate holiday accrual. However, case law has shown that this method can be unreliable, and does not always produce a result that is compliant with legislation. Another possibility is to treat a “week” as equal to the average number of days or hours worked per week over a reference period (say, the last 12 weeks) e.g. if the worker has worked 39 days over the period; an average week would be 39/12 = 3.25 days. The employer could treat a day’s leave as 1/3.25 (about 0.31) of a week, and pay 0.31 x a week’s pay. The employee’s remaining holiday entitlement for the year would be 5.6 – 0.31 = 5.29.
Consequently, until there is some definitive law in this area calculation of holidays for casual workers will continue to be problematic. We would suggest that once it becomes clear what arrangement your employer is proposing that you then seek legal advice.
*Helen Frankland assisted with this answer.