A step towards change?

BEIS has published an important consultation on calculating holiday pay. Julie Bann and Beth Edwards look at the proposals.

The Supreme Court in the case of Harpur Trust v Brazel [2022] UKSC 21, has caused massive implications for employers of sessional workers or term-time only workers.

By way of summary the Supreme Court held that there is no legal right to pro rata holidays for part year workers. This means that workers and employees such as Ms. Brazel are entitled to receive the full entitlement of 5.6 weeks holiday, regardless of how much time they work per year.

This has created an anomaly for employers who are faced with paying the same amount of holiday pay for term time only workers as that provided to full time workers, which doesn’t appear to be fair in the circumstances.

We therefore welcome the fact that BEIS have launched a consultation into calculating holiday entitlement for part-year and irregular hours workers. In the consultation BEIS proposes retaining the current 52-week reference period for holiday pay calculation for all workers.

However, this would now include weeks where no work is done by the worker. This is contrary to the current position where weeks where a person has not worked are excluded from the 52 weeks. BEIS state that this would bring holiday pay entitlements in line with the actual time workers spend working, which would be a more equitable approach for employers.

In addition, BEIS states this process provides benefits for workers; it argues that under the current system, an employer could be incentivized to engage a worker for as little as one hour a week to avoid having to exclude an unworked week. Doing this would reduce the worker’s overall entitlement and pay.

BEIS state they are seeking views from all stakeholders, including employers, workers, business representative groups, unions, and those representing the interests of groups in the labour market.

The consultation will be open until 11:45pm on 9 March 2023.

Julie Bann is a partner and Beth Edwards is a trainee solicitor at Sharpe Pritchard LLP.

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