Following a recent decision by the UK Supreme Court, workers on zero hours contracts could be entitled to more annual leave that what they have previously been getting
In Brazel v The Harper Trust (2022), the Supreme Court ruled that hourly-paid employees and workers who work throughout the year, but not necessarily every week, are to be treated as “part-year workers” and so should be entitled to the full holiday entitlement of 5.6 weeks.
Previously, many employers of zero hours workers would calculate the holiday entitlement by multiplying the total number of hours worked in the year by 12.07%. That percentage was often used as a rule of thumb because it was the proportion of total holiday entitlement (5.6 weeks) out of the total number of working weeks in the year (52 – 5.6).
However, in Brazel, the Supreme Court has said that by using 12.07% of total hours worked, employers were effectively capping the holiday entitlement of those who do not work every work to below 5.6 weeks.
Since workers on zero hours contracts are now entitled to 5.6 weeks, even if they do not work every week, the only legitimate method for calculating holiday pay is the Calendar Week method. Each time a zero hours worker requests annual leave, the employer has to work out the average weekly pay over the last 52 weeks, excluding any weeks the worker did not work. If a worker takes a week’s holiday, they should be paid an average week’s pay.
The amount of holiday already taken during the holiday year should be deducted from 5.6 to give the outstanding entitlement.
It is now unlawful for an employer to roll up accrued holiday pay with your pay in each pay period. But if your employer does happen to do that, and is calculating your entitlement as 12.07%, then it is possible that you are being underpaid if you do not work every week.
Obviously, if zero hours worker wants to take part of a week as annual leave, it’s important to understand what constitutes a day. A zero hours worker may not necessarily be working 7-8 hours in per shift – some may work four or five hours, for example, others may work 12 hours, depending on their job. Since “day” is not defined in law, then what constitutes a day’s leave depends very much on the individual context. If a typical shift is for a particular worker is, say, four hours, then one day’s leave would be four hours.
It’s important to note that the decision in Brazel does not apply to part-time workers, who are contracted to work fixed hours or days every week, just not five days a week. A part-time worker who works, for example, three days per week, would be entitled to 3x5.6 weeks’ leave (16.8 days or 3/5 of 28 days).
Furthermore, the judgement does not apply to those workers who are genuinely casual workers - someone whose casual worker agreement states they are a casual worker, each assignment is a separate contract and a P45 is issued at the end of each assignment. However, Zero Hours Justice is aware, however, that many employers employer casual workers in a way that is far from casual. Whether a casual worker can claim to be a part-year worker depends on the day to day reality and, in particular, whether there was a continued umbrella of employment or an expectation that the employment relationship continued during weeks when there was no work.
If you are currently on a zero hours contract and believe that your employer has calculated your holiday pay incorrectly, you may be able to bring a claim for unlawful deduction of wages. You would need to submit the claim to the employment tribunal within three months less a day of the date that the incorrect holiday payment was made.
For more information or advice about zero hours contracts, please feel free to call our free national helpline or contact us via our online form.
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