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Irregular hours and part-year workers: holiday pay

For holiday years starting on or after 1 April 2024, there is a new holiday accrual system for irregular hours and part-year workers. They will no longer be entitled to 5.6 weeks’ holiday each year.

Under the new system, irregular hours and part year workers will accrue annual leave at the end each pay period at a rate of 12.07% of the number of hours worked in that pay period, up to a maximum of 28 days per year. Special rules will apply if the worker is on sick leave or family leave.

This new system nullifies the effect of the Supreme Court’s decision in The Harpur Trust v Brazel which said that the holiday entitlement of part-year workers could not be pro-rated below 5.6 weeks per year, no matter how many weeks they had actually worked each year. The new system means that the annual leave entitlement of such workers will be proportionate to the number of hours they have actually worked.

A person will be an irregular hours worker, in relation to a leave year, if, under the terms of their contract, the number of paid hours that they will work in each pay period during the term of their contract in that year is wholly or mostly variable.

A person will be a part-year worker in relation to a leave year if, under the terms of that contract, they are required to work only part of the year and there are periods within that year of at least a week which they are not required to work and for which they are not paid.

Employers will also be able, if they wish, to use rolled up holiday pay for irregular hours and part-year workers. This enables them to add holiday pay on to the basic rate of pay which the worker receives when working and then the worker is paid nothing when they take holiday. Where an employer elects to pay rolled-up holiday pay to an eligible worker, it must be: