Prior to the case of Harpur Trust v Brazel & Union 2019, holidays calculations for those workers not on fixed hours could be based upon 12.07%. Each holiday year a person working 5 days or more gets 28 days holidays ie 5.6 weeks holiday (28 days divided by 5 days) under the Working Time Regulations. The 12.07% calculated on basis of working 5 days or more over 52 weeks minus 5.6 weeks equals 46.4 weeks and 5.6 divided by 46.4 is 12.07%.
Annual Leave
The Court held that 12.07% should not apply and proceeded to clarify that all workers are entitled to a minimum of 28 days paid annual leave. Even if they do not get given work or paid for parts of the year and this leave must be paid at the rate of a normal week’s pay based on the average payment for the preceding 52 weeks (pay reference period) where pay is irregular.
In a situation where a worker as at the calculation date has been employed by their employer for less than 52 complete weeks, the number of complete weeks for which the worker has been employed will apply as the pay reference period.
Statutory payments
Also, when calculating an average over a 52 week pay reference period, it appears that you only include weeks for which the worker was actually paid their normal regular weekly pay thus it must not include weeks where they were not paid as not been working and where there are weeks that the worker has been paid statutory payments then the Government guidance states, “In our view, statutory payments should not be included in the calculation for holiday pay. A week where a worker receives statutory payments instead of their regular pay should be excluded from the 52-week reference period. The employer should then count back a further week to bring the total up to 52 weeks’ worth of pay data” – see (1) below.
A full list of statutory payments can be found on the Government website see (2) below.
Permission was granted in June 2020 to appeal the Court of Appeal decision and the Supreme Court will hear the case on 9 November 2021.
Until the Appeal is heard, we provide below an example of a holiday calculation: -
Over last 52 weeks, worked total of 1560 hours (30hrs average per week) (including overtime /bonus /commission) and over the 52 weeks earned £25000 gross and worker decides to take 1 day off, then holiday pay will be: -
1560 hours divided by 52 = 30 hours (average hours)
£25000 divided by 1560= £16.01 per hour
30 hours per week, divided by the working days in the week(5days) = 6 hours per day
Therefore £16.01 per hour x 6 hrs= £96.06 holiday pay for 1 day
Average working week is 30hrs
30hrs x 5.6 = 168 hours of paid holiday per year (28 days), see (3) below.
For further information, please call our HR/legal advice-line on 01455 852028.
