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Calculating holiday pay for term time only workers

Full time, permanent workers are entitled to a minimum of 28 days holiday per year, or 5.6 weeks (12.07% of annual pay). Part-timer workers are entitled to pro-rata holidays based on the number of days they work per week (again at 12.07% of their annual pay).

When it comes to part-time workers, who work irregular hours and only during term time, the Court of Appeal has held that their holiday is not calculated on the same pro-rata basis.

The Claimant is a music teacher in permanent employment but working term-time only, on irregular hours (around 32) per week. The EAT held that her holiday pay should be calculated based on a 12-week average of hours worked, making, on her hours, holiday pay around 17.5% of annual pay, rather than 12.07% for staff working a whole year.

The Court noted that not applying the pro rata principle could lead to anomalous results if ‘part-year workers’ worked a few weeks a year but still had 5.6 weeks leave per year, but if employers take on such staff on permanent contracts (e.g. due to Disclosure and Barring checks), who would not get the benefit of more leave, the advantages of permanent employment may come with additional costs in holiday pay, which wouldn’t apply to freelancers. The Court noted that the circumstances of part-year workers may vary widely (from offshore oil rigs to education), and the approach in this case is straightforward and should be followed.

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