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Supreme Court confirms holiday for part-year workers should not be pro-rated

Summary

In the case of Harpur Trust v Brazel, the Supreme Court has ruled that paid holiday entitlement for workers who only work part of the year should not be pro-rated. A part-year worker on a permanent contract is entitled to the full 5.6 weeks' holiday entitlement. For those with irregular hours the pay should be based on the average pay over a 52 week reference period, disregarding any weeks not worked. The judgment ruled that the 12.07% method that many employers have been using to calculate such holiday pay is not correct.

This case impacts permanent part-year workers and not part-time workers who work throughout the year.

What does this mean for employers?

• Employers engaging workers on part-year permanent contracts or zero hours permanent contracts should review their contractual arrangements and holiday pay practices.
• Employers may wish to move away from permanent contracts and use a series of shorter contracts or ensure that individuals engaged on part-year permanent contracts are given some work every week (to avoid the windfall holiday pay for those who do not work each week).
• In particular, employers using the 12.07% method to calculate holiday pay for those with irregular hours should be revisiting their approach. Employers who have been using such a method should be prepared for claims of...

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