Calculating part-time workers’ holiday entitlement can quickly become a complicated matter. There is no single piece of legislation or guidance on the approach to take. However, employers are under an obligation both to ensure term-time workers receive at least the statutory minimum entitlement of 5.6 weeks’ paid annual leave a year, and that they are not treated less favourably than full-time workers.
The following guide for employers examines the rules relating to term time only contracts holiday pay, including pay reference period rules relating to workers without fixed hours or fixed pay.
Who is classed as a term time worker?
A term time worker is someone who is contracted to work a certain number of weeks per year, where their non-working time is scheduled at regular, planned periods and is accounted for by a combination of annual leave and unpaid leave.
There are various different types of term time worker depending on the specific nature of their contract. A term time worker can be employed on a full-time or part-time basis, and under a permanent or temporary contract. A term time worker can even be employed intermittently, working during term time periods as and when the need arises.
Where employed under either a full-time or part-time permanent contract, the worker should usually be paid their normal weekly rate of pay for all school holiday periods. However, other term time workers will only usually be paid for hours actually worked and so not during school holiday periods. This includes:
- Workers paid by the hour
- Supply teachers provided by an agency
- Temporary workers on a short term contract
- Workers on a zero hours contract
Term time holiday entitlement
With the exception of those who are genuinely self-employed, all workers are legally entitled to 5.6 weeks’ paid holiday per annum. For someone working full time 5 days a week this equates to a total of 28 days, although bank holidays and public holidays can be included as part of that statutory leave entitlement.
Many term time workers will have employment contracts entitling them to additional paid holiday beyond the statutory minimum. In the absence of any express contractual entitlement to paid holiday, the term time worker will still begin to accrue the statutory minimum as soon as they start their term time job.
The leave year can be set by the employer, for example, to run from 1 January to 31 December, during which time the worker must take their leave entitlement, although often the contract of employment will only allow workers to take their annual leave during the school holidays.
If the worker started their job part way through the leave year, they will only be entitled to part of their total annual leave entitlement for that year. Where a statutory leave year has not been set, this will start on the first day of a new job.
Pro rata calculations
For term time workers on permanent contracts, the statutory entitlement to paid holiday accrues in exactly the same way as those employees who work all year round, namely, monthly in advance at a rate of 1/12 of their annual entitlement.
For term time workers who are not retained by their employer between periods of work, for example, they are paid by the hour, work as a supply teacher, or are working under a short term or zero hours contract, the position is different. In these circumstances, it is often easier to adopt a pro-rata approach, calculating their paid holiday entitlement based on the number of hours worked.
The pro-rata approach means taking the statutory minimum of 5.6 weeks paid leave and dividing this by the remaining 46.4 weeks in the year, where holiday is accrued at a rate of 12.07% of the total hours worked in a year. By way of example, if a term time worker undertakes 30 hours teaching in a week, they would have accrued 3.6 hours leave for that particular week, ie; 12.07% of 30.
Holiday pay entitlement
The amount of pay that a term time worker should receive for any holiday they take will depend on the amount of hours they work and how they are paid for those hours. The general principle is that holiday pay received by a worker should reflect what they would have earned if they had been at work.
This will depend on the term time worker’s contract. If they have a permanent contract, on either a full-time or part-time basis, it is likely they will be paid their normal weekly rate of pay.
When a worker does not work fixed or regular hours, and so does not receive the same amount of pay each week, month or other specified pay period, and is not paid during school holiday periods, the situation becomes more complicated.
In these circumstances an employer should look back at the previous 52 paid weeks to calculate what that term time worker should be paid for a week’s leave. This is known as the holiday pay reference period. This is a substantial increase on the previous 12 week period.
The pay reference period must include the last 52 weeks for which the worker was actually paid, substituting any whole weeks in which no pay was received for weeks in which pay, however minimal, was received.
If a term time worker has not been in employment for long enough to build up 52-weeks pay data, their employer should use as many complete weeks of data they have. For example, if a worker has been with their employer for 40 complete weeks, that is what the employer should use, ignoring any weeks in which no remuneration was payable.
There will also be a limitation on how far employers should look back to reach 52 weeks’ of pay data. Any weeks that are before 104 complete weeks prior to the first day of the worker’s holiday are not included.
Term time holiday FAQs
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Legal disclaimer
The matters contained in this article are intended to be for general information purposes only. This article does not constitute legal advice, nor is it a complete or authoritative statement of the law, and should not be treated as such. Whilst every effort is made to ensure that the information is correct, no warranty, express or implied, is given as to its accuracy and no liability is accepted for any error or omission. Before acting on any of the information contained herein, expert legal advice should be sought.
Author
Gill Laing is a qualified Legal Researcher & Analyst with niche specialisms in Law, Tax, Human Resources, Immigration & Employment Law.
Gill is a Multiple Business Owner and the Managing Director of Prof Services - a Marketing & Content Agency for the Professional Services Sector.
