Many veterinary practices approaching sale are surprised to learn the methods they use to calculate holiday pay for their staff do not take into account developments in employment law over the last five years.
Since the 2014 decision in the Bear Scotland case, a number of further rulings have clarified the calculations to be undertaken and the elements of pay and working hours to be included. Where a practice has failed to do so, the incoming buyer will ask for protection against future claims related to the seller’s period of ownership.
Practices who have no intention of selling at present are, as employers, required to pay staff holiday pay in line with current legal requirements.
The settled position requires practices to pay employees the same amount when they are on annual leave as they are paid when they are at work.
Employers often find it challenging to calculate holiday pay for fluctuating working patterns. At a veterinary practice, a variety of staff will work additional hours to cover overnight and weekend shifts, and additional hours to cover for sick colleagues or to finish emergency work that has arisen at the conclusion of their planned shift. Accordingly, holiday pay needs to be taken into account against this background.
Where staff do not have fixed or regular hours, meaning their pay is not always the same, their holiday pay should be calculated on the average number of hours worked at their average hourly rate in the previous 12 weeks.
If you regularly pay overtime (regardless of whether it is compulsory or voluntary overtime) or commission to employees, the practice must include these payments in at least 4 weeks of paid holiday (or pro rata for staff who work on a part-time basis).
If you have any questions on the calculation of holiday pay at your veterinary practice, please contact Stephenie Malone of HCR and HR4VETS: 01905 744985 or firstname.lastname@example.org