Holiday Pay for Part-Year Workers FAQs

The decision means that all term-time only (or part-year) workers and employees who are retained on a year round basis are entitled to 5.6 weeks' statutory holiday. Employers are not allowed to reduce statutory holiday entitlement on a pro-rata basis in order to account for part-year working arrangements. This means that term-time only and part-year workers and employees may receive a proportionately higher amount of annual leave than their year round counterparts.

It affects workers or employees who are engaged throughout the year, where either or both of the following apply:

- they only work for part of the year (such as under a term-time only/term-time plus working arrangement) and their salary is based on working weeks and holiday entitlement calculated on a pro-rata basis

- they work irregular hours and their holiday entitlement has been calculated using the 12.07% (or similar) multiplier.

Those who work term-time only but who are paid on a year round basis will not be affected by the decision as their annualised pay already incorporates more than 5.6 non-working weeks with pay.

All permanently retained workers and employees are entitled to a minimum of 5.6 calendar weeks' paid leave every year, irrespective of how many weeks they actually work in the year.

Each individual's holiday pay entitlement must be calculated by first working out their weekly pay, and then multiplying this by 5.6.

For salaried staff with normal working hours over a set number of weeks (ie term time or term time plus) whose pay does not change, you will need to use the individual's weekly pay due under their contract of employment. You will need to ensure they receive 5.6 weeks as holiday pay based on the their normal weekly pay. This will usually be incorporated into their annualised salary. By way of example, their annualised salary may be comprised of 33 paid working weeks and 5.6 weeks paid holiday weeks and so will be based on 38.6 paid weeks annualised across a 52 week year.

For staff whose pay changes or who work irregular hours, they also will be entitled to receive 5.6 weeks' paid statutory holiday. You will need to calculate their weekly pay based on an average of the remuneration of their last 52 worked weeks.. You will need to discount any weeks where they did not work and replace unworked weeks with worked weeks going back up to a maximum of 104 weeks.

For salaried staff, you will have incorporated their holiday pay into their annual salary using the method set out above.

For workers or employees whose pay changes or who work irregular hours, your normal approach would be to use the last 52 worked weeks to calculate their weekly pay, and then to multiply this by 5.6 to calculate their annual holiday pay entitlement. Where the individual has not accrued 52 worked weeks at the time the holiday pay calculation is carried out, the number of complete weeks during which they have been employed should be used in place of the 52 week reference period.

No, in that all permanently retained workers and employees are entitled to a minimum of 5.6 calendar weeks' paid annual leave. This basic statutory entitlement to 5.6 paid weeks cannot be reduced to account for part-time working. However, part-time staff will need to take fewer days off in order to take 5.6 weeks away from work. There will therefore be a pro-rata calculation to carry out in order to calculate the holiday entitlement of part-time workers or employees where this is expressed in days or hours.

To take the example of a part-time worker or employee who works regular hours on a three day per week basis, this person would need to take 16.8 days' holiday in order to benefit from 5.6 paid weeks away from work. A colleague working regular hours over 5 days a week would need to take 28 days of holiday in order to benefit from 5.6 paid weeks off work.

It is also important to note that for holiday pay purposes, the calculation of a week's pay will be based on part-time salary, so the amount of annual holiday pay will be based on 5.6 times the worker's part-time weekly pay.

No, the judgment does not affect contractual holiday entitlement. Our recommendation is that if you have a contractual holiday scheme in excess of the 5.6 weeks' statutory entitlement, you should pro-rate the contractual holiday pay element to reflect any part-time working pattern, including term-time only working.

Where staff already receive at least 5.6 weeks' paid leave (where contractual entitlement has been pro-rated but equates to at least this amount) they will not have any entitlement to additional leave in light of the Brazel judgment.

You must ensure this is reflected in your contracts and ensure everyone is paid for a minimum of 5.6 weeks' holiday.

You should also note that pro-rating contractual holiday entitlement is not the same as capping holiday entitlement to statutory holiday only for part-time or term-time only workers and employees. If you allow full-time or year-round staff a more generous holiday entitlement, and do not offer the same on a pro-rata basis to part-time and term-time only staff, you may risk claims of less favourable treatment on the grounds of part-time status.

Yes, but the amount of days or hours they take off will depend on the amount of time they spend working for each employer. Their week's pay calculation will also have taken into account their part-time salaries.

For example, for a worker who has one contract for three days a week, and another for two days a week, their holiday pay entitlement will be as follows:

- contract 1: week's pay based on 3 days a week x 5.6

- contract 2: week's pay based on 2 days a week x 5.6

The rules surrounding overtime are complicated and much will depend on individual circumstances such as whether the overtime is compulsory, voluntary, regular, or whether it can be said to form part of 'normal remuneration'.

If overtime is guaranteed, compulsory or regularly worked it should be included in at least the first four weeks' holiday pay.

For workers or employees with no normal working hours, the position is more straightforward as a week's pay is calculated as an average of all pay earned over the last 52 worked weeks, so overtime will automatically be included.

Yes, you can control when workers or employees take their leave, and this can include a requirement to take holiday outside term time, as well as a requirement to take leave in blocks of time rather than in single days. We recommend you use staff contracts to control when holiday is taken in order to ensure holiday pay calculations remain manageable, and that you are aligning your holiday payments to when staff actually take their holiday.

In the absence of any contractual wording designating when holiday is to be taken, it is likely to be extremely difficult to calculate the amount of leave available to workers or employees on irregular hours at any given point in the year.

You should ensure your contracts of employment and current practices reflect what you are telling staff in respect of when leave must be taken.

The general principle is that an individual should receive their holiday pay when they take their leave.

For staff on annualised salaries this is straightforward.

For other staff it is sensible to make holiday payments at set times of the year which coincide with holiday periods.

For example you could pay 1.5 weeks at Christmas, 1.5 weeks at Easter and 2.6 weeks at Summer.

You have the choice in relation to this (subject to contractual requirements).

Any payment for holiday will be subject to usual deductions for tax and national insurance and pensions contributions.

Any current part-year or irregular hours workers or employees, and those who have left within three months, can potentially bring a claim for holiday pay arrears by way of a claim for unlawful deduction from wages. In order to bring a claim the individual will first need to invoke the ACAS pre-claim conciliation process. The ACAS process should be started within three months of the last 'unlawful deduction'. There may be questions around limitation periods and whether claims are out of time depending on the timing of the holiday year and when payments for holiday are made.

An employment tribunal may still consider a complaint presented outside the time limit if it is satisfied that it was not reasonably practicable for the complaint to be presented before the end of the three-month period, and the claimant has presented it 'within such further period as the tribunal considers reasonable'.

It is of course possible that unions (or solicitors) may offer to act collectively on behalf of groups of workers or employees affected by this decision.

For claims brought on or after 1 July 2015, legislation provides that an employment tribunal can only look back two years from the date of the complaint. Claims will be quantified based on calculating the 5.6 weeks' entitlement using the 52 week average calculation, setting off any holiday pay that was actually received.

In limited circumstances it is possible the two year claim period could be extended, however in most cases this will be unlikely.

The European Court of Justice, in the case of King v Sash Windows Workshop Limited and another C-214/16 focused on a situation where an individual was deprived from taking leave (and not just underpaid for that leave). The principle from the Sash Windows decision was then applied by the Court of Appeal in the case of Smith v Pimlico Plumbers [2022]. That case established that if an employee or worker has been refused the right to take paid annual leave, their annual leave will accrue from year to year and crystallise in full on the termination of their employment. The Court also confirmed that permitting the individual to take unpaid leave in these circumstances would not be enough to prevent the right to paid leave from accruing.

We have also considered whether there is any route to extend the period of arrears by pursuing this as a contractual claim. There is legislation which specifically restricts individuals trying to circumvent the two-year cap by instead presenting a claim in the civil court for breach of contract which has a limitation period of six years from the date of claim. The statutory rights under the Working Time Regulations cannot be implied into contracts to confer a contractual right to paid leave. It is possible however that individuals might try to rely on express contractual wording to pursue a claim for breach of contract which, if successful, would be for a period of six years' arrears from the date of claim.

At present however it is most likely that the two year period would apply.

Workers and employees are entitled to paid holiday under the Working Time Regulations. This decision will not impact individuals who are genuinely self-employed, or only engaged on short term fixed-term contracts which are shorter than a full holiday year.

Organisations may want to consider whether there is an alternative contractual basis to engage with staff who are only likely to work for a part of the year or who are only required for specific periods or tasks.