How is holiday entitlement calculated for part-year workers such as term-time-only staff?

Full answer

Holiday pay calculation for part-year and irregular-hours workers has been a genuinely contentious area of UK employment law, following a landmark court case that changed how many employers had been calculating entitlement for years. **The background -- the Harpur Trust case** A Supreme Court ruling in a case involving a school's music teacher (employed on a permanent contract but only working, and being paid, during term time) found that the previous common method of calculating part-year workers' holiday pay (based on 12.07% of hours worked, averaged in a way that could inadvertently reduce their effective entitlement) actually resulted in these workers receiving proportionately MORE holiday entitlement relative to a full-year worker doing the same total hours, not less as some employers had assumed -- the case ultimately confirmed that part-year workers on a permanent contract are entitled to the FULL 5.6 weeks of statutory holiday, not a pro-rated amount based on the proportion of the year they actually work. **Why this matters for term-time and other part-year workers** A worker on a permanent contract who only works part of the year (such as term-time-only school support staff, or seasonal workers on year-round permanent contracts) is legally entitled to the same 5.6 weeks of statutory holiday as any other permanent worker, calculated based on their NORMAL working pattern during the periods they do work, rather than being reduced simply because they do not work for the full 52 weeks of the year. **The subsequent 12.07% accrual method for irregular hours workers** Following further legislative changes specifically addressing how holiday pay should practically be calculated for irregular hours and part-year workers (rather than just confirming the underlying entitlement principle from the Harpur Trust case), a specific accrual method allows holiday pay to build up at a rate of 12.07% of hours actually worked in each pay period -- this percentage is derived from the fact that 5.6 weeks of holiday represents 12.07% of the remaining 46.4 working weeks in a standard year (52 weeks minus 5.6 weeks of holiday), and applying it to actual hours worked in each period aims to deliver a fair, proportionate holiday entitlement for genuinely irregular working patterns without the complications of the previous averaging-based reference period method. **How this differs from the previous averaging method** Before this specific accrual method was introduced, holiday PAY (as opposed to entitlement) for irregular hours workers was generally calculated using a reference period (looking back over a set number of recent working weeks, historically 12 weeks, later extended to 52 weeks) to calculate an average week's pay -- the newer 12.07% accrual approach for irregular hours and part-year workers is specifically designed to simplify this calculation and align it more directly with actual hours worked in each specific pay period, rather than requiring a look-back averaging exercise. **Rolled-up holiday pay as an alternative** For irregular hours and part-year workers specifically, employers can now also choose to use "rolled-up holiday pay" -- adding an extra 12.07% on top of a worker's normal pay for hours actually worked, rather than paying holiday pay separately when leave is actually taken -- provided this is clearly itemised on payslips, giving employers and workers a simpler alternative to tracking and paying holiday separately when leave is taken. **Worked example** A term-time-only teaching assistant works 32.5 hours a week for 39 weeks of the school year (during term time), with no work (and traditionally no pay) during the school holidays. Using the 12.07% accrual method, her holiday entitlement builds up based on 12.07% of the hours she actually works during term time, ensuring she receives a fair holiday entitlement reflecting her full permanent employment status, rather than her holiday pay being calculated in a way that treats her unfairly compared with a full-year worker doing an equivalent total number of hours across the year. **Practical tip** Employers of part-year or genuinely irregular hours workers should specifically check they are using the correct, current calculation method (12.07% accrual, or properly itemised rolled-up holiday pay) rather than an older averaging-based method that may no longer correctly reflect current legal requirements, since getting this wrong can result in significant back-pay claims, particularly given how widely this issue has affected sectors like education support staff and casual/zero-hours retail and hospitality workers.

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