Important Employment Law update regarding Holiday Pay
Added: 03 Aug 2022
Leading legal experts – and ASVA trade member organisation – Anderson Strathern – have shared a legal update with ASVA which will have implications for many employers in our sector.
Last week, the Supreme Court issued a landmark decision around holiday pay, noting that nothing in the Part-Time Workers Regulations prohibited part-time workers from being treated more favourably than their full-time counterparts.
In summary; all permanent members of staff – i.e., those on continuing employment contracts (as opposed to casual, self-employed or consultant workers) – are entitled to 5.6 weeks’ pay in accordance with the Working Time Regulations. Notably, this includes employees on zero hours permanent contracts who may go many weeks without performing any work and other weeks working the full week. The decision means they have an automatic right to 5.6 weeks’ holiday regardless of the amount of time they work.
Employers who previously utilised 12.07% to determine holiday pay for permanent part-year employees (using a 12-week reference period) should now calculate holiday pay based on the employee’s average weekly remuneration in the previous 52 weeks.
Employers may want to review their holiday pay arrangements to ensure they are compliant with the Supreme Court Judgement.
Anderson Strathern has shared a briefing note with us which includes details of the decision and how to correctly calculate holiday pay. This briefing note can be found here.
If you have any specific questions about this, please contact our CEO, Gordon Morrison, at gordon@asva.co.uk and he will liaise with ASVA’s key contact at Anderson Strathern on your behalf.
In related news, the UK Government has also produced new guidance on employment status and employment rights matters to support individuals and businesses to better understand what rights apply to them. The guidance can be found at this link.