The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 – definition of “part year worker”

The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 (the “new Regulations”), came into force on 1 January 2024, although the changes to holiday arrangements come into effect for holiday years beginning on or after 1 April 2024.

The new Regulations make several changes to holiday arrangements for those working irregular hours or for only part of the year (“part-year workers”) and do not affect how holiday entitlement should be calculated for those working regular hours. In particular:

• They allow an employer to calculate holiday accrual for such workers at a rate of 12.07% of hours worked in a pay period. This reverses the decision of the Supreme Court in the Harpur Trust v Brazel case and returns the position to that adopted by most schools prior to the Supreme Court judgment.
• They allow an employer to pay rolled-up holiday pay; a practice where a worker’s hourly rate is enhanced to incorporate an element for holiday. Rolled up holiday pay will need to be calculated using the worker’s total earnings over the relevant pay period.

A question which has been asked by many schools is whether the definition of a “part-year worker” under the new Regulations will apply to term time only staff who are paid an annual salary.

On a strict reading of the new Regulations, it is our view that, whilst there is some ambiguity in the definition of a part-year worker, those staff engaged on a term time only contract, who have weeks where they are not expected to work but continue to be paid over 12 months, would not be a “part-year worker” for the purposes of the new Regulations.

The recently published government guidance appears to support this interpretation, helpfully providing an example of an individual who is paid an annualised salary over 12 months but has periods of time that last more than one week where he is not working. The guidance suggests that the individual would not be a part-year worker for the purposes of the new Regulations.

Given that most teaching staff will fall into this category, it is our view that the new rules on part-year workers will not apply to them. As a result, there remains a degree of uncertainty as to how holiday should be calculated for this category of staff. This suggests that the decision in Brazel will continue to apply and  those members of staff should receive, and be paid for, a minimum of 5.6 weeks’ holiday each year.