An important judgment last year, in the case known as Harpur Trust, confirmed that part-year workers (those who don’t work all year round) are entitled to a larger holiday entitlement than part-time workers who work the same total number of hours across the year.
This has caused anxiety for particular employers where workers might be employed to work part of the year only, for example in hospitality during busy times such as Christmas or over the Summer.
If this does impact you, then you’ll be interested to know that the Government have just announced a consultation to try to ensure that holiday pay and entitlement received by workers is proportionate to the time they spend working.
As the law currently stands when you are calculating holiday pay you need to count back 52 weeks to work out average pay, but crucially you must skip any weeks when no pay is earned.
The Government’s proposal is that employers can just count back 52 weeks, whether or not anything is earned in those weeks. This will almost certainly reduce the amount of holiday pay for part year workers. The Government’s impact assessment calculated that this change will save businesses £113m per annum.
The consultation runs till early March and we will let you know what the result is. We suggest you take legal advice about what, if anything, you should do about holiday pay for part year workers until we know the outcome of the consultation.