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  • Writer's pictureSusan Wakelin

Is your holiday entitlement calculated correctly?

Updated: May 25, 2023

Do you understand the recent changes made by the Supreme Court last year in the Harpur Trust v Brazel judgement for those working irregular hours?

Confusion over the Harpur Trust effect

The Harpur Trust v Brazel judgment held that the correct interpretation of the Working Time Regulations 1998 is that holiday entitlement for part-year and irregular workers should not be pro-rated, so that it is proportionate to the amount of work that they perform each year.


Who does the new holiday calculation changes effect?


The recent judgement effects the calculation of holiday entitlement and pay for those working irregular hours, such as those on zero-hour contracts or those working term-times only.


How do you calculate holiday entitlement and pay, according to the new judgement?


The annual statutory entitlement for all workers is 5.6 weeks, whether they work full-time or part-time. Part-time workers on regular hours receive 5.6 weeks' holiday entitlement, the same as full-time workers, but receive their part-time pay for each week ie where they work three days each week, they are paid the equivalent of three days for each week of holiday.


However, the new Harpur Trust v Brazel judgement held that holiday entitlement and pay for those working irregular hours should be calculated in a different way. The judgement held that the calculation of holiday entitlement and pay for those working irregular hours, should be based on a worker's average weekly pay in a reference period of typically one year. However, although this sounds reasonable, the important element in the calculation, that has been criticised, is that it excludes weeks within the year that the worker did not work.


Is this new holiday entitlement and pay calculation fair?


This change in legislation has attracted a lot of criticism as it is seen as being unfair, whereby workers on irregular hours are now entitled to a larger holiday entitlement than part-time workers who work the same total number of hours across the year.


Will there be further changes to holiday entitlement and pay for those working irregular hours?


The Department for Business, Energy and Industrial Strategy (BEIS) have proposed the introduction of a holiday entitlement reference period to ensure that holiday entitlement and pay more accurately reflects the proportion of the year those working part-year or irregular hours actually work.


The government launched a consultation on a revised calculation for holiday entitlement and pay for those working irregular hours on 12 January 2023. The new proposal involves calculating the total number of hours worked in the previous 52 weeks, but this time includes weeks in which no work has been performed and multiplying this by 12.07% to find a part-year workers annual statutory holiday entitlement in hours.


The consultation is short and closes on 9 March 2023, which shows that the government recognises that the new calculation needs to be amended quickly, to level up the calculation of holiday entitlement and pay for those working irregular hours to those working regular part-time hours.


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