The government has published updated guidance on holiday entitlements:
For organisations who engage zero hours and/or part year workers, the recent case of Harper v Brazil Trust EAT (2018) has determined that there is a risk of underpayments when using the using the ‘12.07% of hours worked’ rule when calculating holiday entitlement. The correct approach is the statutory calculation: that holiday pay should be based on normal remuneration averaged over the previous 12 weeks of work (this will increase to 52 weeks from April 2020).
This decision in this case was upheld by the Court of Appeal in August 2019.
These two articles below from Eversheds provide a useful summary of the issues in the case and some suggestions on how to approach holiday calculations for zero hours/part-year staff. However each situation will depend on the specific arrangements for your staff and if in doubt you should seek advice.
- Article from Eversheds 2018 following EAT decision
- Article from Eversheds 2019 following the Court of Appeal decision
Action for charities:
- Review holiday entitlements and contracts for all staff, especially for zero hours/part-year workers.
- Also bear in mind the Good Work Plan which comes into force in April 2020, which will increase the pay reference period from 12 weeks to 52 weeks.
- Seek advice if you are unsure how this applies to your organisation.
If you need to review your holiday calculations for staff in line with the above guidance and need support, contact advice@rva.org.uk or telephone 0118 9372273