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Zero hour contract holiday pay calculation

Hi All

I just wonder if anyone can share their holiday pay calculation on zero hour contract based on the Harpur Trust v Brazel ruling together with the new 52 weeks referencing period please?

For example if we have a new exam invigilator started last year and only have worked for 30 hours on one single week on a hourly rate of £10. 

Does it mean that the holiday pay will be £300 (average weekly salary) x 5.6 weeks (statuory holiday) = £1,680?

Secondly, how often do you recacluate and paying their holiday pay? per academic year or per term, etc?

Any advice or guidance would most apprecaited.

Many Thanks

K Lai

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  • Hi King
    Welcome to the community.
    The minimum of 5.6 weeks holiday applies to someone working a full year (52 weeks). Therefore, an employee only working 1 week is entitled to 1/52 of the 5.6 which is 0.1077 weeks (5.6/52=0.1077). Your employee is due the average weekly wage (£300) x 0.1077 which equals holiday pay of £32.31.
    There are other ways to calculate but all give roughly the same figure and as long as you are consistent in how you calculate for all under this scenario any is acceptable.
    One alternative is an 'uplift' on hourly pay calculation which is just over 12% but cannot remember the exact percentage figure but I am sure someone else will respond to you with this.
  • To help out Susan, it's 12.07%.

    However, the Brazel case established that this wasn't to be treated as a cap for part-time or part-year workers and that, where the 12-week average hours immediately preceding the holiday exceeded the 12.07% norm, WTR allowed (indeed, mandates) for such workers to be paid at the higher rate.

    www.bailii.org/.../1402.html

    Then we take into account a 52-week reference period.

    In OP's example, therefore, yes, the invigilator in question ought to receive holiday pay following their single reference week as calculated. *However* don't overlook the fact that, in working a single week, the employee in question hasn't *earned* a full week of paid holiday. So their holiday pay would be £10/hr for the number of accrued hours of holiday earned in a single week's work. If they are off for a whole week, but haven't accrued a full week of holiday, they don't get paid the whole week!

    In most cases, you simply wouldn't permit a worker who has accrued less that a single day of holiday to book holiday they haven't accrued, although of course, if they are zero hours, they can just decline to work - but it doesn't count as paid holiday!

    When it comes to re-calculations, you would re-calculate each time holiday is booked (yeah, I know... Payroll Managers hate this one simple trick...), based upon their total earnings over the previous 52 weeks, *including* time already taken as holiday.

    Although this can seem counter-intuitive it isn't just a very literal reading of the WTRs. What it means is that employers who provide part-time or zero hours workers with sporadic, intense periods of continuous employment (as was the case for Brazel) without offering them permanent contracted hours, the employer has to anticipate that the worker will want to book accrued holiday at the highest possible rate of compensation - thus providing welcome income relief to intensively-worked PT/ZH workers and/or motivating the employer to consider offering them permanent contracted hours for the sake of reducing their cost of holiday pay.

  • Thanks Susan and Robey for the replies. :)
  • In reply to Robey:

    It works the other way too though Robey - so take the exam invigilators, in schools we use them in two main periods of the year - around mocks and then formal exams. My preference is to contract them on a permanent zero hours basis, so that they have some continuity of employment, and treat them as ongoing employees - with training, benefits etc.

    The Harpur Trust case however makes it ridiculously expensive to do so - they may literally get more holiday pay than actual pay. We therefore have to contract them simply for the periods when they are working and then end their contracts in-between (and because we're a school, do the myriad checks that you are required to do for safer recruitment purposes each time they are re-contracted), because you can only pro-rate the holiday allowance in the first year of employment. My concern is that the ZH workers don't get a better deal from this - they get less security and continuity.