Warning over worker's holiday entitlement and pay

The case concerned the calculation of annual leave and holiday pay entitlements for workers who work varying hours only certain weeks of the year, but may have a contract for the whole year ('part-year workers').

The Supreme Court considered the work of part-year workers as irregular because they don’t work the same number of hours as either full-time or part-time workers.

The court held that as Ms Brazel was a worker, she was entitled to 5.6 'weeks' of paid annual leave in each leave year.

This meant that the statutory entitlement of 5.6 weeks cannot be calculated pro-rata to reflect the actual number of weeks worked per year. In doing so, the Supreme Court rejected the commonly used percentage method of calculating holiday entitlement for part-year workers at the rate of 12.07 per cent of hours worked as it did not comply with the Working Time Regulations 1998.

Although this case concerned a music teacher, it is relevant to the agricultural industry. The hours worked by an agricultural worker may vary week by week, for example during the harvest or lambing, and thus may be considered part-year workers.

Although this case applies to the whole of the UK, in Wales, the updated Agricultural Wages (No. 2) (Wales) Order 2022 provides additional provisions for holiday entitlement pay for agricultural workers. The order provides that where agricultural workers work various days within a week, when calculating holiday entitlement, it is important to calculate the average days worked per week.

This is calculated by adding the number of days worked each week over a 52-week period (or actual number of weeks for which payment is due to the worker if fewer than 52) and then divide by 52 (or the actual number of weeks if fewer than 52).

For example:

A worker is employed at Grade C with varying hours, working five days per week:

– Gross contractual pay over previous 52 weeks = £17,035.20

– Average pay for 52 week period = £17,035 ÷ 52 = £327.60

– Daily rate = £327.60 ÷ 5 = £65.52

– Total number of days worked over previous 52 weeks = 234

– Average days worked per week over the 52 week period = 234 ÷ 52 = 4.5

The average weekly rate = 4.5 x the daily rate of £65.52 = £294.84.

Therefore, when calculating the holiday entitlement of agricultural workers in Wales, attention should be drawn to both the Agricultural Wages (No.2) (Wales) Order, to this case, and to statute generally.

There may be serious consequences for failing to calculate holiday entitlement and holiday pay correctly.

Get in touch on 01938 536405 or email advisor@agriadvisor.co.uk

Rhys Gittins of Agri Advisor