The UK summer school job adverts are already going up for 2022, featuring the usual references to 12.07% holiday pay. The problem is that employment law changed in April 2020, making it difficult for many employers, especially those in education, to simply use a pro-rata basis to calculate such remuneration. Those that choose to continue to do so may face a challenge in an employment tribunal or by the tax inspectors, according to ACAS.
The change to the law follows a court case brought by a music teacher on a zero-hours contract. She successfully argued, in Harpur Trust vs Bazel 2019, that using the 12.07% pro-rata calculation meant she was paid less money than she should have been under the working-time regulations then in place, which stated that those who work varied hours should have their holiday pay calculated over a 12-week period.
The Government responded by changing the working-time regulations so that all holiday pay must be calculated based on the actual hours worked, together with the amount paid for them averaged over the last 52 weeks in which they received payment, counting back up to two years, if necessary. This is one of several policies, including an outright ban on rolled-up pay, designed to claw back the tax shortfall from unpaid or underpaid holidays, which is estimated at £1 billion a year.
In reality, the new form of calculation will make very little difference to those employing staff on annual fixed term, fixed-hours contracts, because this is the type of contract on which the figure of 12.07% is based.
However, it still presents a headache for those employing zero-hours workers. For zero-hour employees who have worked on and off for a year or more, schools should be able to use payroll records to calculate the holiday pay as long as all working hours including, for example, meetings and CPD are also recorded on the pay slips.
Those employing summer school staff face even greater challenges because, while in many cases pay may be fixed, actual working hours on such courses inevitably vary week to week.
Hours worked for summer staff typically include unpaid overtime, meetings, travelling time and training, as well as time on call while at work – all defined as working hours under National Minimum Wage Regulations (NMWR) and all likely to vary from week to week. So, to get an accurate figure for hours worked, schools may have to base their calculations on the National Minimum Wage records, which all employers have a statutory duty to keep.
New seasonal employees can have their holiday pay calculated on the basis of hours worked and pay received from the date they first started. However, we could find no guidance on fixed-term contracts, so it’s unclear whether returnees who have worked for the same employer previously will need holiday pay calculation to include hours and pay from previous seasons.
For schools struggling to work out how to implement these changes, our best advice is to talk to an employment lawyer or call the employers’ advice service at ACAS.
For the latest government guidance visit https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/901968/calculating-holiday-pay-for-worker-without-fixed-hours-or-pay.pdf
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