Calculating term time holiday entitlement is not as straightforward as you might think. It may come as a surprise that those on term-time contracts are entitled to 5.6 weeks’ paid holiday, even if this works out more favourably than comparable full-time (year) workers when the entitlement is calculated as a proportion of the actual number of days worked during the year.
Following a tribunal case (Harpur Trust vs Brazel) the Court of Appeal held that the holiday entitlement of term-time workers should not be pro rated to that of full-year workers.
In this case, the employer had based its holiday pay on the basis of 12.07% of the employee’s hours each term, in line with the ACAS guidance relating to casual workers. This is a commonly applied calculation but it was found to result in the employee receiving less than 5.6 weeks’ holiday pay per year.
The appeal concluded that the calculation of a week’s pay for term-time workers with irregular hours should be based on the average hours worked during the 52 weeks before the calculation date, excluding those weeks where no pay was due. (Prior to 6 April 2020, a week’s pay was calculated as the average weekly remuneration over the previous 12 weeks.)
What does this mean for me?
The bottom line is that employers must ensure that the paid holiday of term-time workers is not less favourable than that of full-time workers (or risk a claim for breach of the Part-time Workers Regulations 2000).
In addition, employers must be sure that term-time workers receive at least the statutory entitlement of 5.6 weeks’ paid annual leave a year. As before, these can be designated during school holidays and paid in instalments over the year.
Regular term time hours
The calculation is straightforward for term-time workers with regular hours and where their salary is paid in equal instalments over the year. In this case, the employer should add 5.6 weeks (at their set weekly hours) to the number of weeks the employee is contracted to work during the year, and then average that level of pay into equal instalments to ensure that they are receiving the minimum statutory paid holiday.
For example, a teaching assistant who is contracted to work 39 weeks a year, will be paid for an additional 5.6 weeks, giving a total of 44.6 weeks pay. The actual holiday weeks will be designated during non-term time. The pay for those holiday weeks is combined with the pay for working weeks and averaged over the year, often in a monthly salary.
Irregular term time hours
For term-time workers without regular hours, the employer can still pay holiday pay in instalments over the year (weekly or monthly for example) as long as they make sure that the total amounts to at least 5.6 weeks’ pay, at the rate based on the average hours worked during the 52 weeks before the calculation date.
This is complex and time consuming to do, but we are watching the case law carefully for further developments. The Harpur Trust vs Brazel case has been raised to the Supreme Court and will be heard in November 2021.
For help setting up your contracts of employment or with systemising your holiday calculations do get in touch with the team here.
