Holiday Pay For Irregular Workers (And Some Positive Developments For Employers)

The question of how to pay holiday pay to workers working irregular hours has for many years been a vexed one. Rolling up holiday pay has technically been unlawful (although as a matter of pragmatism it has remained a wide-spread practice). In 2022 the Supreme Court in Harpur Trust v Brazel cast doubt on the usual calculation method of 12.07% of hourly pay, and ruled that workers working a part year but employed year round could not have their holiday pay calculation pro-rated to the actual weeks worked. This has led to unexpected liabilities and significant confusion for employers who engage a variety of workers with atypical working patterns.

Following a period of public consultation, the Government has legislated to regularise the position, and the new legislation comes into effect for leave years beginning on or after 1 April 2024 (The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023).