How are holidays calculated for changing hours on a zero hours contract?

I am inquiring about holiday entitlement for myself and co workers. Our contract states that we get normal public holidays that are observed by the company plus 25 days annual leave which will be pro-rata’d for part timers. We are basically on a zero hours contract. Some weeks we could work five days a week and work 40 hours; others we could work 20 hours and some weeks it could just be a couple of days and 7 hours. We receive a 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 could change in that week. I hope I have explained my circumstances well enough for you to understand.

Annual Leave

 

Thank you for your query, which I note relates to proper calculation of holiday entitlement.  You confirm that you and your colleagues work erratic hours, but the previous manager allowed you all 36 days’ holiday per year. You are concerned that now this manager has left, this will change and you want to understand how holidays for workers without a fixed pattern of work should be calculated.

All workers qualify for 5.6 weeks’ paid holiday, including public holidays, under the Working Time Regulations 1998 (WTR), regardless of their length of service. However, this can cause problems when there is no fixed pattern or amount of work done.

If your employer does not change its system, then that is no issue.  If your employer changes the way it calculates holidays, and does so without consulting you or seeking your agreement to this change, and any new way is detrimental to you, then you may have an argument that this is a breach of your contract.  My suggestion would be to raise a grievance in this regard.

Turning to how holidays could or should be calculated for workers with no fixed hours, this can be difficult to advise with any certainty.

As the entitlement to paid holidays under the WTR is expressed as “weeks” rather than days or hours, one 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).

So, for example, if you have worked 39 days over a 12-week period; an average week would be 3.25 days – i.e. 39/12. Your employer could treat a week’s leave as 3.25 days and treat a day’s leave as 1/3.25 (about 0.31) of a week, and pay 0.31 times a week’s pay for a holiday taken. Your remaining holiday entitlement for the year would be 5.6-0.31 = 5.29. If there are any weeks in the 12-week reference period that you received no pay, these should be taken out of the equation, but days of paid holiday should be included.

This method of calculation ensures that you would receive the equivalent of an average day’s pay for each day’s leave. However, it does involve a lot of administration for the employer, with the potential for errors to be made, as a separate calculation must be done each time you took a holiday. Depending on fluctuations in working patterns, a day’s holiday in June may be paid at a slightly different rate (and represent a different fraction of a week) than a day’s holiday taken in September.

Your employer could reduce administration and confusion by instead requiring holiday to be taken in whole weeks. For each week, you could be paid a week’s pay based on the usual calculation; i.e. the average weekly pay for the previous 12 weeks. Requests for odd days off could still be granted, but be treated as a request for an unpaid non-working day (which for a casual or zero-hours worker would usually be a permissible way for the employer to treat it under the contract). However, as the annual leave entitlement is 5.6 weeks this does leave the question of how the employer treats the remaining 0.6 weeks’ leave. This could be dealt with by using the calculations in the paragraph above, or simply requiring you to take a week’s leave with 0.6 of a week’s pay (with the remaining 0.4 of the week being treated as unpaid non-working time).  However, this could cause issues for you as you are guaranteed at least 7 hours’ pay a week.

As your employer has not made a decision about this, and you work hours which change all the time, it is impossible to properly advise you as to how much holidays in terms of days you are entitled to have, other than saying you are entitled to 5.6 weeks’ paid holiday a year and to be paid your “normal weekly pay” for any holidays taken.

I would suggest that you wait to see what your employer does, if anything, and then seek further advice when you have more information.

*Lucy Flynn assisted in answering this query.



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