Because they only work for two months of the year, I have always told my client to calculate the annual leave on the basis of 12.07% of the hours and pay actually worked and received. I’ve now been told this is incorrect, is that really the case?
Yes, it is now the case that part year workers, i.e. those permanently (on an ongoing basis) employed can no longer have their annual leave pro-rated for the number of weeks in the year that they actually work. This employee will therefore need to be given a full entitlement of 5.6 weeks paid annual leave, calculated on the basis of their average salary over 52 working weeks.
This is the case since the Court of Appeals decision in Harpur Trust v Brazel, in 2019, which was confirmed by the UK Supreme Court in July 2022. Whilst this outcome means that part-year workers are in a more favourable position than those who work all year round, it has now been confirmed by the UK’s highest court that this is the correct application of the law.
Moving forwards, your client will need to ensure they are giving this employee, and any others on a similar arrangement, their full entitlement. Due to the nature of the engagement, presumably it would defeat the purpose of their employment for the annual leave to be taken during the two months when they are working on the programme. It is therefore advisable that your client agrees with the employee that this leave is to be taken outside of the two months they are working each year. This can be done by asking them to book the leave and paying them for it at another time of the year.
For the current leave year, your client will need to ensure the employee takes their full 5.6 weeks of entitlement and are paid correctly for this. The employee may argue for back pay, for which can go back as far as two years (if they are within three months of the end of the previous annual leave year, or the last time they took annual leave. Please note that tribunals may waive the three-month requirement due to the circumstances).
They will also need to review the documentation provided to the employee. It is likely that any holiday clauses in their contract will need to be changed, as well as any relevant holiday policies. From now on, the documentation will need to show the full entitlement to ensure the employee is aware of their rights and entitlements.
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