A recent ruling highlights a new worker category – part-year workers, i.e. those on permanent contracts who only work varying hours during certain weeks of the year. They're entitled to a full 5.6 weeks' paid holiday, regardless of how many hours worked.
The case
The Supreme Court looked at how much paid annual holiday a music teacher engaged on a zero-hours contract (working varying hours during only some weeks of the year) was entitled to.
Her employer had calculated her holiday pay as 12.07% of her earnings each term. She brought a tribunal claim for unlawful deduction of wages.
The Supreme Court, agreeing with the Court of Appeal, ruled that (despite only working some weeks of the year) she was entitled to the full 5.6 weeks' paid holiday given to workers under the Working Time Regulations (WTR) and that her holiday pay should be calculated using the Calendar Week Method.
The Calendar Week Method calculates holiday pay as an average week's pay (calculated over the previous 52 weeks, ignoring weeks where the worker wasn't working) multiplied by 5.6.
As the teacher only works some weeks of the year, this method results in an increased average pay, giving her a proportionally higher amount of holiday pay than full-time teachers at the school.
Although this seems unfair, the Supreme Court noted that the UK Parliament had made a policy choice to allow a more generous entitlement for some workers (including those working irregular hours) under domestic law.
Therefore, this was the correct interpretation of the WTR.
What this means for you
This ruling confirms that part-year workers – i.e. those on permanent contracts who only work varying hours for part of the year – have the same holiday pay entitlement as those working all year, even if this gives them a proportionally higher amount of holiday pay.
This includes term-time workers, and can potentially also apply to shift workers and workers on zero-hours contracts (depending on the circumstances).
You must calculate holiday pay for any part-year workers using the Calendar Method.
If you don't, these workers could use this ruling to bring claims for unlawful deduction from pay in relation to the previous 2 years of holiday pay.
Note that part-year workers shouldn't be confused with part-time workers, i.e. those who work a certain number of hours every week of the year (unless on holiday) – this ruling doesn't affect them.