Part-Year Workers - Ruling on Calculating Holiday Pay
- Date: Tuesday 24th September 2019
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A recent ruling has clarified how holiday pay for permanent staff who only work part of the year (e.g. term-time workers) should be calculated. The Court of Appeal has determined that holiday pay for such workers should be calculated using their average earnings over a 12-week period and not pro-rated.
At the Appeal the term “part-year worker” was coined to describe someone on a permanent employment contract who only works for part of the week for part of the year such as a music teacher or sports coach. The Appeal found that holiday pay for part-year workers should be calculated differently to part-time staff who work the full year. The Appeal acknowledged that this different calculation might actually result in a windfall payment to part-year workers but that was how the calculation should operate.
In the case, a music teacher’s holiday pay had been calculated in accordance with the method recommended by ACAS for calculating causal workers’ pay. However, the teacher successfully argued that her holiday pay should be calculated by taking the average weekly pay for the 12 weeks prior to the calculation date and multiplying this by 5.6.
The appeal acknowledged that as a consequence holiday pay for part-year workers will be a higher proportion of earnings than in the case of full-time workers but stated this was not “unprincipled or obviously unfair.”
Source: Gavin Parrott