In an important decision, the Court of Appeal has ruled
that holiday pay for a teacher who worked irregular hours on a
permanent term-time, or so-called "part-year" contract,
should be calculated using her average earnings over a 12-week
period and not pro-rated according to the proportion of the year
worked. The common practice of applying a cap of 12.07 percent of
annualised hours, as suggested by ACAS, was incorrect.
Background law
Under the Working Time Regulations (WTR), workers are entitled
to 5.6 weeks' paid holiday. This right comes from the EU
Working Time Directive which provides for a minimum of four
weeks' paid annual leave. Under the WTR, workers who work
irregular hours (such as casual, bank or zero hours workers) should
be paid holiday pay calculated by reference to the average pay over
the previous 12 weeks before the calculation date (which is the
first day of the relevant period of leave) excluding any weeks in
which no remuneration is payable.
